Low Sugarcane to mills

Raw (unrefined, unbleached) sugar, bought at t...

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Mills facing cane shortage

Dec 13 2010

By Tahir Ali

IT is not a good sight that the yard of Asia’s biggest sugar mill –the Premier Sugar Mill, Mardan— and roads surrounding it, that would have mile-long queue of cane-carrying trolleys and trucks a few years ago, has only a few of them. The mill is  getting a paltry supply of cane.

Officials at the PSM say they increased the price of cane and ensured prompt payment, expecting that the two measures would improve cane supply position to the mill but the growers did not respond.

They maintain that the PSM increased cane price from support price of Rs125 to Rs240 per 40kg to receive better supplies.

Masood Khan, cane manager at the PSM, said increase in cane price had not boosted supply of cane to the mill as expected. “Farmers wanted prompt payment and good returns on the crop. We have increased the price and are paying them within three days. But still the supply is not enough to run the mill.

He said: “We are running the mill intermittently for 8-10 hours a day or even after a break of a day so that enough stock is accumulated for crushing.”

“Our cost of production per kilo has increased to Rs75-78, which means sugar should be sold at Rs80-85 per kg. However, the prices are coming down, making the position of mills unstable,” he added.

According to him, less supply of cane means intermittent running of mills, which increases cost of production, especially in the event of higher prices to farmers, high wages offered to employees, burgeoning fuel prices and various taxes.

“Conversely, gur has no such taxes and burdens. Why won’t it compete with us? Its prices have increased tremendously and it is sold around Rs80-90 a kilo. To enable us to compete with it, we must be given subsidised fuel, power and relief in taxes. Or else gur making should be banned altogether,” he argued.

Haji Niamat Shah, senior vice president of Anjuman-e-Kashtkaran, Khyber Paktunkhwa, also said the government should announce a relief package and a rebate in taxes for Khyber Pakhtunkhwa sugar industry.

Abdur Rasheed, another official at the PSM, said the mill would daily crush around 100,000 maunds of cane five years ago but it was crushing only 20 per cent of the quantity these days.

Welcoming increase in cane price, Shah hoped farmers would grow more cane next year. Increased price would ensure the pledged and continuous crushing at the mills producing more sugar, save jobs of thousands of mill employees, who are laid-off when mills are closed, and help reduce prices of sugar in the country,” he said.

The new price would appeal farmers who make gur through rented gur-ganees. “But I think those with their own gur-ganees will still feel like making gur from their crop,” he opined.

“The new price may not improve cane supply to mills but it speaks volumes of the government’s indifference and lack of information on the ground situation. Look at the price fixed by the government and the one offered by the mills,” said a farmer.

The estimated production of sugarcane in Khyber Pakhtunkhwa is 1.3 million tons. It can produce up to 100,000 tons of sugar if farmers start bringing their crop to mills for crushing instead of making gur.

Ban on movement of gur to seven federally-administered tribal areas and their six provincial counter parts have caused a fall in its demand and as a result the prices have come down by about 20-30 per cent, but farmers are still going for it.

The gur-makers are alleged to have purchased standing crops from farmers and made advance payments to them for the gur they produce, according to a source. According to him, generator-run modern gur-ganees are consuming cane faster than in the past.

To get adequate supplies, the sugar millers will have to enter into contracts with farmers for purchasing their crop at fixed/better price, and a surety for prompt even advance payments before or after cultivation, but much earlier than harvesting.

There should also be a minimum price for certain fixed sugar-content, but farmers should receive a premium price for more sugar-content in their crop.

Investment in research for better varieties of sugarcane and improvement in per acre yield with better sugar recoveries is also required.

Pakistan is the sixth biggest sugarcane producer in the world but is ranks 15th both in cane and sugar yield.

About Tahir Ali Khan (Official)
I am an academic, columnist, and a social worker.

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