The sugar crisis continues
Sugar industry sailing through
By AMANULLAH BASHAR
Jan 15 - 21, 2001
The sugar industry has asked the government to take immediate
corrective measures to save the industry currently passing through difficult times.
People were expecting that following the agreement signed between the
mills and the growers for the purchase of sugarcane, at an agreeable price of Rs50 per
maund would settle down the issue. It is unfortunate that the crisis in the sugar industry
has not yet been resolved.
Though the dispute between growers and the mills of Sindh was resolved
to some extent after both the parties were agreed on the sugarcane price at Rs50 per
maund. Yet the issue of sugarcane price continues to affect the conditions in the Province
of Punjab as the growers in that province are insisting at a price of Rs60 per maund
instead of Rs50 agreed in Sindh.
While the sugar industry was perturbed due to increase in sugarcane
price and increase in Sales Tax which has been enhanced from 3.50 per cent to 4 per cent.
Consequently, the increase in sugarcane price and sales tax altogether have enhanced the
cost of production while the import of Indian sugar at dumping prices are posing a serious
threat to the survival of the local industry.
They slated that beside import of 500,000 tonnes of raw sugar, the
government has allowed import of 200,000 tonnes of refined Indian sugar without
ascertaining the exact size of the local production during the current season. According
to an estimate, total stock of the sugar would be around 32-33 lakh tonnes against the
consumption of 31 lakh tonnes of sugar leaving 1.5 million tonnes in surplus. Had the
government waited till the assessment of the exact size of production the economy would
not suffer out flow of foreign exchange on account of import of Indian sugar.
It is however unfortunate due to this mismanagement in sugar industry
the sufferers would be consumers who have to buy the essential item at a much higher rate.
It may be recalled that before start of the crisis, sugar was being sold at a price of
Rs18 per kg which shot up to the level of Rs30 per kg before the month of Ramazan.
Although the current prices at retail stage is Rs24-25 per kg it is still much higher when
compared with the price of Rs12-13 being sold in neighbouring India? In the best interest
of the people, the economic managers in Pakistan specially those looking after the
agriculture sector would have to evolve a policy to keep price in line with the buying
power of the people at the grass root level.
They are duty bound to keep an eye over the elements politicizing the
agriculture sector to extort or the profiteers who are the masters to create crisis like
situation to achieve their nefarious designs.
To avoid recurrence of such crisis, the government of Sindh had assured
to take appropriate action against the middlemen in the sugarcane marketing and growers
will ensure direct supply of sugarcane to the sugar mills.
The local industry has strongly urged the government that in order to
enable it to meet the threat from imported sugar the duty on import should again be
increased from 15 per cent to 40 per cent so that the local industry could be saved from
crippling effects due to dumping prices offered by the Indian exporters. The local
industry rightly expected of the government to provide level ground to the national sugar
industry against dumping sugar imports taking place at present. The landed cost of the
imported sugar from India, is around Rs22-23 per kg which is much cheaper when compared to
the price of local sugar of Rs24. While the sugar industry has the concerns that under
such a situation how it would survive on one hand, the consumers on the other hand have
their own grievances. They generally feel how Indian sugar Industry managing to sell the
sugar at Rs13-14 per kg to their consumers. Naturally they have the feelings that what is
the sauce for the goose should also be the sauce for the ganders. The sugar industry also
pleads that in order to restrict import of sugar from India it can be placed on the
negative list. It is a matter of great concerns that despite having a strong industrial
and agriculture base, the sugar industry is forced to operate below 70 per cent of its
capacity mainly because of all these problems. The available capacity to produce an export
surplus is difficult to be utilized. While the government is determined to tap all
available resources, the potential of sugar industry is going waste. The situation offers
the challenge to our economic managers for some brain storming to make out some ways to
get benefits of available resources in sugar industry at the optimum level.
Responsibility lies on the shoulders of the economic managers to evolve
a mechanism in such a manner that enables the local industry to survive while the price of
this essential item remains within the reach of the consumers. One way to get out of this
perplex situation is to sacrifice on the part of the government either in the shape of
withdrawal of sales tax or to give subsidy to this sector as is being practiced in India,
said some experts in the sugar industry.