SIMMERING SUGAR CRISIS
SHAMIM A. RIZVI
Apr 27 - May 10, 2009
Once again there is simmering sugar crisis in the country with the commodity being sold between Rs40 to 45 per kg in various parts of the country. Various reasons are being advanced for gradual rise in the prices of sugar?an essential kitchen item?during the past two months despite it is being the crushing season. Of them are low production of sugarcane especially in Sindh province (where production of sugarcane is stated to have fallen by about 40%), the Government failure to take timely action to allow or arrange import of raw sugar, and increase in the support price of sugarcane. As a result the prices which ranged between Rs35 to Rs38per Kg in January-2009 have shot up to Rs40 to Rs45 in April.
The story of looming sugar crisis is not new. It is just the repetition of one reverberated last year when the Government had timely imported sugar to avoid the crisis. This year the total production of sugarcane was around 11 million metric tons as compared to 17 million metric tones last year. The shortfall of around seven million metric tone was due to a number of factors, the chief among them being the defiant attitude of the mills owners, who like the previous years refused to obey the government decisions in buying and crushing the product and non-payment of huge amount of Rs1200 million as outstanding due to the farmers.
The other factors that contributed in lowering the production were high cost and non-availability of urea, which is most essential ingredient in improving the crop. Government's apathy towards support of the farmers and keeping the mill owners on tight leash has also added to the causes that had brought down the production of sugarcane by huge 40 percent. According to available statistics, of 32 sugar mills located in Sindh 31 sugar mills crushed around 10.28 million tones of sugarcane in current season of 2008-09 and has produced 10.98 million tones, which is 40 percent less as compared to the last season 2007-08. Thatta sugar mills remained closed during this season.
Abdul Majeed Nizamai, President Sindh Abadgar Board, a leading growers' body, told newsmen in a press conference that last year he had predicted 40 percent shortfall of sugar cane as well as production of sweetener. He said that last year the total production of sugarcane stood around 17 million metric tones. However, this season 2008-09 the province has produced 11.2 million metric tones of sugarcane, which is 39.5 percent less as compared to last season. He said last year (2007-08) sugar production of the country stood at 4.7 million tones, carry over stock was 0.5 million tones so the cash in hand stock of sweetener was 5.2 million tones, which includes 0.3 million tones of sugar that the millers had hidden.
When asked about reasons behind decline of sugarcane production this year, he said that the lack of interest among the farming community due to defiant and noncompliant attitude of mills owners, shortage and high prices of agricultural inputs coupled with shortage of water resulted in gradual decline in the sugarcane production in the province. When asked whether he sees sugar crisis in the country in future, he said that situation would clear in the month of August. He said that sugar prices in the international market and the neighboring countries India and Afghanistan cast its shadow in the Pakistani market. And if prices of commodity were higher in neighboring countries as well as in the international market, the unscrupulous elements would take advantage of price fluctuation and the sweetener finds its way out of the country resulting in sugar crisis in local market.
He, however, said that government had already placed import orders of 2 million tones of sugar. Giving example of defiant attitude of sugar millers, he said that last year government had fixed Rs67 price of 40 kg of sugarcane on the start of crushing season but in January 2008 through a notification the prices were decreased and fixed at Rs63 per 40 kg, which showed how the miller forced the government. During the outgoing crushing season, government had fixed prices of sugarcane at Rs81 per 40 kg but the last trolley was sold at Rs77 per 40 kg.
Responding to a query on outstanding dues of farmers, Abdul Majeed Nizamani said that an amount of around Rs1200 million of farmers were outstanding against the sugar mills for last season 2007-08. However, this season the farmers got almost all amount of their produce. About shortage of urea, he said that total consumption of urea in whole of country is 5.4 million metric tones. The local production of urea stood at 4.8 million which showed a shortfall of 0.6 million tones.
According to the analysts close to sugar sector, it was unfortunate that despite having all the statistics and figures in their hand, the government was sitting idle and not formulating any strategy to meet coming challenges. Like previous years, the government was waiting for the crisis to assume serious proportion only then they would move on emergency level to handle the situation, which was slowly going out of control, they maintained.
Government had announced a number of steps last year but for some unknown reasons it could not enforce its decisions, which had created the crisis. It seems that the influential in higher political circles would once again have their say and once again they would be benefited if the crisis arrives.