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LAHORE: Sugar millers have expressed their inability to start the crushing season 2021-22 because of refusal by the banks to allocate working capital to the mills in absence of a No Objection Certificate (NOC) by the government, compelling mills to start crushing premature sugarcane and heavy fines imposed by the Competition Commission of Pakistan (CCP), and reopening of tax cases by the Federal Board of Revenue (FBR) for the last five years without any legal justification.

"The Punjab government is reluctant to issue NOC to the mills despite the fact that all the dues have been cleared as a result of which banks are adamant to issue working capital to mills. Mills cannot pay cane growers their dues within 15 days of buying if they do not get loans from the banks," said PSMA Central Chairman Chaudhry Zaka Ashraf.

He was flanked by PSMA Punjab Chairman Chaudhry Muhammad Aslam, Chaudhry Waheed and large number of representatives of sugar mills in Punjab. While some of the millers joined the press conference through video link.

Zaka Ashraf made it clear that they were not going on strike rather they are saying they are unable to start crushing without working capital. He said sugarcane worth Rs 500 billion is standing in the fields and millers could not pay them as per new rules within 15 days of purchase as they are cash starved. He said millers have to face criminal cases as per new sugar factories control act if they fail to pay growers within 15 days.

Crushing season 2020-21: Sugar production likely to surpass initial official estimates

Zaka claimed that the mills were being compelled to start crushing before time this year too. He said that last year mills were asked to crush premature sugarcane because of which production remained 300,000 tons short and the government had to import expensive foreign sugar. Rates of imported sugar is 25 to 30 percent more than the local produce and it only benefits foreign growers and industries and deprive our national kitty of taxes, he added. To a question, he said that the best time to start crushing season is after November 30.

He opined that start or closing operations of any industry should be the discretion of its owner. He said millers were compelled to do so by introducing the clause of Rs 5 million per day fine if anyone does not start crushing on date announced by the government.

Zaka Ashraf claimed that the CCP had recently imposed a fine of Rs 44 billion fine on sugar industry which was highest fine in the history of the country on any industry. Similarly, he said Rs 18-20 billion was imposed by the FBR on some mills on five years old cases.

The PSMA chairman responding to various queries about sugar prices said that their cost of production per kilogram is Rs 104 while the government had fixed the price at Rs 84.75 per kilograms. He said they had asked the government in the past to waive off sales tax which would bring down the cost of production to Rs 90 per kilogram but the government turned a deaf ear to it.

The PSMA central and provincial chairmen on this occasion offered the government to appoint independent chartered accounts to calculate the sugar cost of production to ascertain the real wholesale and retail prices. They said the government had given Rs 18 billion in subsidy on import of sugar and selling it on lower rates. They appealed the government to save the sugar mills from further destruction by resolving all these issues to save livelihood of hundreds of thousands of families attached with this industry.

Copyright Business Recorder, 2021

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