PSMA mulling abrupt mills closure

The Pakistan Sugar Mills Association (PSMA) is considering abrupt closure of mills in protest against what it called 'devastating situation' which has left the industry in complete disarray.
Huge unsold stocks and falling rates of the commodity and indifference on the part of the government towards the industry have been listed main reasons of possible closure of the mills.
Ex-factory prices of sugar have slipped to Rs 15.25 and Rs 15.10 per kg (inclusive of sales tax which amounts to Rs 2.50) in Punjab and Sindh, respectively.
The on-going crisis has created strong feelings among the millers and every day is adding to their woes. They are convinced that the policy of adding to production without export was virtually their nemesis.
They feel that every kg which they produce was bound to add to their loss and continuity of this loss-making situation would end up in complete erosion of the domestic industry.
The millers' repeated calls for export of surplus stocks have remained abortive which have strengthened their belief that they have to fend for themselves in facing the consequences of producing more than demand.
Sugar industrialists are considering to shut down mills soon after Muharram. PSMA chairman Sikandar A Khan told this correspondent that he was being pressed by fellow mill-owners for closure of mills soon after Ashura.
When he was talking of the problems of the industry some millers phoned him from Karachi to know whether he was considering the option of closing down mills. His answer to the callers was vague. The call was of short duration but it added to his worries, he said.
The chairman argued that import of over 0.6 million tons sugar from India and policy of fixing of sugarcane price by the government were the reasons of bad days for the industry.
He resumed his talk, saying: "Look, this is the situation on ground. How can the millers afford to continue with the policy of adding to their loss?" He said he has no answer to the questions of his fellow millers.
Sikander termed the situation confronting the industry as very painful. He said every kg of sugar was adding Rs 2.50 to the millers' loss. This has left the industry in trouble though its degree differs from mill to mill.
The latest production figures released by the PSMA Secretary General K A Qazalbash on Friday are more than enough to indicate the gravity of the situation.
According to the report, as on February 15, 2.384 million tons sugar was produced and 1.692 million tons sugar was left unsold with the millers.
Piling up of stocks is a multifaceted problem. It would cause irreparable loss to the industry, besides adding to bad debts and further delayed payments to the growers.