The country's largest white refined sugar producers - Sindh and Punjab - are likely to suspend sugarcane crushing within one week if the growers do not ensure ample sugarcane supply of the crops to all mills, industrial sources told Business Recorder on Tuesday evening.
They said that a high-level meeting of members of Pakistan Sugar mills Association (PSMA) Sindh Zone was due to meet on Wednesday to decide the fate of sugarcane crushing besides drawing a future line of action in this connection.
A senior PSMA Punjab zone when contacted on phone said if the situation prevailing in Sindh had struck the Punjab sugar mills they would also suspend sugarcane crushing because they could not afford the huge losses of running sugar mills with no outcome.
A senior member of PSMA Sindh zone on the condition of anonymity said that an important meeting was held on Tuesday to discuss the issue had arisen in the wake of lesser supply of sugarcane to mills, adding that a high level meeting of the association members would also be held on Wednesday to decide whether or not to continue the on going crushing process.
He refuted the allegations that sugar mills in Sindh had been brought to a halt deliberately by their owners and said that all mills had been operational in Sindh since November 5. However, he alleged that growers had stopped the sugarcane supply to the mills, which had badly affected the crushing and brought about huge financial losses for millers.
He accused growers that they had come out with a plan to increase sugarcane support price from Rs 67 per ton. He said the growers were supplying only 20 percent of sugarcane, which were insufficient and warned that if the same situation continued then the millers would be constraint to stop sugarcane crushing. "We (millers) have no other option to lock mills if the growers are not willing to supply their crops on required scale on time," he expressed concern.
He denied reports about the sugarcane crushing had been stopped in Sindh, however, said in the meeting called for Wednesday it would be decided. He also said crushing season would be for 150 days.
Moreover, industrial sources from Punjab said sugar millers had fire boilers in mid November in line with the agreement with the government and was still continued. However, he warned if the conflict between growers and millers in Sindh had occurred in Punjab then the sugar mills would stop crushing forthwith.
"Millers cannot afford huge expenditures for running their mills without any significant financial outcome as each mill have to bear around Rs 1.5 million per day expenses while 40 such mills are operational in the province," he added.
He denied that sugar millers were creating monopoly in the market by delaying sugarcane crushing, and said that sugar prices were decreasing constantly and a dire situation had come for the millers. "Establishing monopoly is very difficult, sugar price has been decreasing on a regular basis to alarming scale," he added.
He alleged that government had announced an uncalled tender on November 20 against the agreement concluded with sugar millers that Trading Corporation of Pakistan (TCP) would call any kind of tender on sugar imports after November 30.
"Government has backed out its pledges by calling tender for sugar imports before the November 30 and also announced Rs 12 billions of subsidies on sugar which came a serious blow for millers as sugar prices came down in the retail market," he explained.
Likewise, Sugarcane Growers Association (SGA) - the apex body of sugarcane farmers - rejected the allegations of millers and ruled out suspension of sugarcane supply to mills.
President Qurban Ali Shah denied allegation that growers had stopped supply their sugarcane for getting high prices, said that growers were keen to supply their crops before they got dry and lost weight. "Sugarcane which we have will get dry with the passage of time and grower will have to bear huge loses if not supply them on time to mills," he maintained.
He alleged that sugar millers had adopted delaying tactics for imposing their conditions on growers, as they were not accepting crops on time. "They (millers) have come out with a proper plan to manipulate the situation by saying that growers have stopped sugarcane supply and will purchase crops on conditions and lower rates,'' he added.
He said millers would not initiate crushing before January 15, 2007 and would continue their inconstant crushing operations till then. He alleged that millers would then bring the growers under pressure to sell their crops on cheap rate or not more than Rs 50 per ton as the sugarcane weight till then would have gone down by around 30 percent.
He also warned that if the mills did not fire boilers then growers would go all out for their survival regardless of consequences. "If we (growers) die of hunger then we could go far beyond the limits to survive," he added.
He said he had also called meeting tomorrow on Wednesday to evolve a strategy to battle the prevailing situation. SGA and PSMA Sindh zone have demanded the Chief Minister Sindh's intervention to resolve the conflict between both the parities at earliest.
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