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LAHORE: The Pakistan Sugar Mills Association, Punjab Zone, has claimed that the sugar industry is heading towards crisis like situation where most of the mills might end into default in payment of bank loans, payment to growers, sales tax dues, income tax and other government dues of multifarious nature, due to fixation of ex-mill price of sugar.

It said due to price fixation of Rs.80 per kilogram only by the government of Punjab, all the sugar mills of Punjab have gone into an utter financial disadvantage. The cost of production of sugar in Punjab sugar mills has gone to Rs.105.77 per kilogram due to very high sugarcane price of up to Rs.350 per 40 kg, though the government of Punjab has kept the support price of sugarcane at Rs.200 per 40Kg.

In a letter addressed to Minister of Industries Hammad Azhar who also is the Chairman Sugar Advisory Board, the PSMA Punjab reminded him that it had drawn his attention in a letter in November 2020 that sugarcane prices were going higher because of numerous factors including middlemen and there is a need to control it. However, the government in response said that it could not control the sugarcane prices due to marketing factors.

Narrating financial woes of the mills, the PSMA said the recent government step of fixing the rate would also affect the salaries and wages to employees. It also claimed that sugar which sugar industry is giving for poor segment of the society has in fact due to the involvement of investors is reportedly going out of Punjab.

The letter also drew attention that the quantity required for Ramazan Bazaars by the Punjab province’s own determination is 30,000 tons whereas the Punjab government is lifting 155,000-tons. This gap has given the investors incentive to get them involved by getting registered for quota allocation and black market the subsidized sugar in Punjab and also smuggle it to other provinces.

The PSMA asked the ministry to convene an emergent meeting to discuss the issues being faced by this sector especially the mills of Punjab.

It said that the agenda of the said meeting should include fixation of sugar price @Rs.80 per Kg by the government of the Punjab against actual cost of production of Rs.104 per Kg and its devastating impact on the sugar industry.

Copyright Business Recorder, 2021

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