Delayed crushing by the sugar mills for the current
season may entail serious economic implications especially on the
agriculture sector in Sindh. Syed Qurban Ali Shah, president of the
growers association while speaking at a press briefing warned that late
start of the crushing by the sugar mills may lead to a shortfall of a 3
million ton of wheat crop of winter season, possibility of reduction of
under cultivation area for sugar cane next season as well as damage to
the standing cane crop.
It may be noted that as a result of negotiations
between the sugar millers and the government, it was earlier decided
that the sugar mills will go into production from 1st of November, the
date was extended to Nov 15 as the sugar millers were reluctant to go
into production unless the unsold stock of the sugar was lifted by the
government. Now the deadline for start of the crushing has been fixed on
The sugar millers were taking plea of facing serious
liquidity crunch for not going into production. They are of the view
that over Rs9 billion were held due to held inventory of unsold sugar,
they were unable to pay the dues of the growers.
The situation took a new turn when the provincial
minister for agriculture allow downward revision of the support price
from Rs43 per 40 kg to Rs41 which sent a wave of agitation among the
growers who have started demonstrating against unilateral decision of
the minister for reduction of support price.
Syed Qurban Ali Shah expressed his apprehensions that
at present the farmers were caught in a perplexed situation in which
neither they are able to harvest the crop nor they can water to the crop
to save the land for next wheat crop. However, if the water was not
given, the standing crop may go dry for want of moisture. On the other
hand watered land was not advisable for sowing of the wheat crop. This
state of uncertainly may have serious implications for next wheat crop
he reiterated. These are the affairs which may force the farmers to
reduce the area of cultivation for sugarcane crop next year.
Earlier, the government had agreed to lift at least
100,000 tons out of the unsold stock and will pay 70 percent down
payment of the lifted stock. However, on the constant demand of the
millers, the government has agreed to pay 85 percent of the down payment
for the sugar to be lifted from the stock. And the government also
agreed to do away with levy of 10 percent interest and 25 percent
penalty for failure on part of the mills in clearing dues to farmers.
The farmers claim that millers have to pay dues worth over Rs3 million.
The growers were however unhappy over the situation
and stage demonstration in front of Sindh Assembly and the Karachi Press
Club against what they called connivance between the millers and the
provincial government. They have charged serious charges of corruption
and have asked NAB to intervene into the situation.
On the other hand, the fresh development of accepting
demands of the millers may help sorting out the situation as the payment
to the millers by the TCP will enable the millers to clear dues they owe
to the growers. The growers however can start wheat sowing provided the
sugar mills start lifting the cane crop and pay dues to the farmers.
On the recommendation of the Ministry of Commerce,
the Economic Coordination Committee has authorized Trading Corporation
of Pakistan (TCP) to initial payment of 85 per cent of the sugar lifted
from the mills.
The situation was still complex because of conflict
of interest between the millers as well. Out of the total unsold stock
of sugar, the sugar mills in Punjab claim they have a stock of 338,000
tons while the remaining stock is lying in Sindh which makes the total
inventory of 430,000 tons. Punjab mills also demanding that there should
be no quota for lifting of the stock from Sindh. On the other side,
mills in the province of Sindh say that they produce more than the
actual requirement of the province and have to face a surplus every
year. There is a need for permanent solution of the surplus sugar in
Sindh, otherwise the strong industrial base in this sector may suffer
serious erosion and economic disaster if the situation of uncertainties
goes on in future also.
It is interesting to note that both the growers and
the sugar mills time and again claim that the sugar crisis was a pure
economic issue and has nothing to do with any sort of politics. It is a
matter of interest that representatives of growers and the sugar mills
both are active politician in the province of Sindh as well as Punjab
both were over emphasizing that it's a pure economic issue. This however
sounds interesting when active politicians involved in a issue say that
there is nothing political in that issue.
On the industrial side, there are a few industries,
which offer considerable support to the economic growth of the country.
However, it is unfortunate that both textile as well as the sugar
industries is currently suffering from internal conflicts which
obviously make adverse impact on the overall performance of the two
Cotton textile, sugar, rice are the few sectors
extremely important for economic survival of this country. There is an
immediate need to evolve a pattern for the active segments of the
economy to enable them to move smoothly in future as well.