The Pakistan Sugar Mills Association (PSMA) has drawn attention of Punjab government to bring down the minimum support price of sugarcane back to Rs 45 per maund from existing Rs 60 per maund because the subsidy, being given by the government to the tune of Rs 18 billion, had crashed the sugar market.
According to a spokesman of PSMA, in an SOS to Punjab Food Secretary, the PSMA had brought to the knowledge of the government that any further increase in sugarcane support price would endanger the viability of sugar mills and, if at all, the government decided to increase the sugarcane price, then the industry should be ensured a minimum level in sugar prices to make the crushing economically viable, otherwise it (industry) would not be in a position to comply with its liabilities of financial institutions, government taxes and growers' dues.
While mentioning that undue interference of the government, through Trading Corporation of Pakistan, PSMA said that if immediate measures were not taken to bring the prices to Rs 31/kg, most of the mills would suffer huge losses and would be forced to close down. The government has made arbitrary fixation of high support price of sugarcane just to please one group of stakeholder (growers) while pleasing the other stakeholder (consumer) by giving subsidy of huge amounts on imported sugar on political consideration without realising whether other most important stakeholder (industry) would be in a position to sustain this jolt.
The PSMA further said that increase in minimum support price had brought the industry to the verge of collapse, which is poised to bring mass unemployment, as the industry is one of the largest employers of manpower.