Decline in sugarcane market price

Decline in sugarcane market price

By Tahir Ali

THE ban on supply of gur to Afghanistan despite bumper sugarcane crop and the prolonged cold/dry weather have improved cane supply situation for sugar mills. However, farmers in Khyber PakhtunKhwa remain adversely affected.

Along with fall in price of sugar, per satta (two purs or 150-180kg) price of gur has come down to about Rs8,000-9,000 this season from Rs16,000-17,000 last year. It is for the first time in recent years that gur has lost its competitiveness.

Masud Khan, an official of the Premier Sugar Mills, Mardan, said that an overwhelming majority of farmers were bringing their produce to the mills. “For the first time during this season cane supply has reached 100 per cent delivery. We are receiving around 3,600 tonnes of the commodity daily,” he said adding “against the official support price of Rs150 per 40kg, the growers were being paid Rs158/40kg or around Rs200 per 50kg.”

“Huge cane production, low gur prices and damages caused to the crop by frost with fear of further loss to sucrose contents due to weather conditions, and the need to vacate lands for subsequent crops, are compelling farmers to bring their crops to the mills,” Khan added.

According to Haji Naimat Shah Roghani, senior vice-president Anjuman-i-Kashtkaran KP, farmers widely cultivated cane this year following attractive prices of Rs338/50kg offered by mills, and around Rs16,000/satta price of gur in the market last year. Cane was sold even up to Rs500/50kg to private vendors engaged in juice extracting business.

“Banning movement of gur to the tribal belt and its export to Afghanistan, which led to sharp fall in its prices, the faulty decision of the government to import sugar at the start of crushing season instead of lifting stocks from mills in time, led to fall in cane price severely affecting growers. This, no doubt, helped reduce sugar prices in the market but at a critical juncture making timely payments to farmers impossible, at least for now,” he said.

“The millers are offering a price of Rs200 for 50kg these days. At the present rate of returns and for gur in the market, 300 maunds average per acre yield (15 purs or eight satta) could earn a farmer only Rs60,000 and nearly the same amount if he takes his produce to mills.

The present rate of gur and the rate offered by mills are too little for farmers as the per acre cost of production has increased to almost over Rs60,000 due to steep rise in prices of farm inputs, services and increased land-rent in recent times, especially in the last couple of years,” said Mr Roghani.

“With such a return that only equals the cost of production, farmers would hardly be inclined to grow sugarcane in the coming Kharif season. Does the government understand the risks involved?” he asked.

Farmers in the cane-rich DIK have multiple complaints. Muhammad Ismael, a farmer from Luanda Sharif in DIK, said farmers were being denied indents, a prerequisite for cane-supply to mills. “Indents are issued only to big farmers who have access to right quarters. The farmers with poor resources are running from pillar to post. As gur production was mostly avoided by area farmers, selling cane to mills was the only option,” he said.

”But with indents not issued or delayed for lengthy process as these are being provided through agents against the past practice when it was directly given to farmers, we have to sell our cane to the commission ‘mafia’ at a lower prices but prompt payment. The commission agents buy the crop between Rs135-140 per 40kg against Rs150 offered by Chashma Sugar mills in the area,” he added.

“Payments legally due in 15 days are delayed for months. A farmer who supplied cane to a mill last year received his payments this year. The farmers are also subjected to a cut of around 10-15 per cent on the pretext of poor quality and low sucrose content,” added Mr Ismael.

With gur prices historically low, the commission agents should also have reduced their commission at gur markets. “But they continue to impose a commission of Rs130/pur in Mardan and Swabi while their counterparts in Peshawar and Charsadda were collecting only Rs40/pur. The government must ensure a uniform rate of commission for gur agents in the province,” Mr Roghani added.

“The government is also needed to support farmers through targeted subsidies on inputs. It should remove or reduce general sales tax on agriculture services and inputs. It should allow export of gur and lift the ban on its movement to the provincially- and federally-administered tribal areas,” he stressed.

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