The sugarcane crushing crisis in Punjab is becoming deeper as 26 sugar mills which halted crushing due to higher price of sugarcane and lower rate of sugar have shown inability to restart crushing, well informed sources told Business Recorder. "The government wants that sugar should not be sold above Rs 70 per kg in the retail market whereas the rate of sugarcane is Rs 240- 260 per 40 kg," said one of the stakeholders.
The mills which have halted their crushing in protest are of the view that the price of sugar extracted from sugarcane procured at Rs 240- 260 per 40 kg , is calculated at Rs 82 or 83 per kg including taxes and other incidental charges, then how sugar can be sold at Rs 70 per kg. "How can the sugar mills survive in this situation?" he questioned.
The representatives of sugar mills and secretary food Punjab held a meeting on Tuesday wherein different issues being faced by the industry came under discussion. The secretary food was of the view that sugar mills should issue permits and Cane Purchase Receipts (CPR).
However, industry's representatives were of the view they were ready to issue CPRs to the growers at the rate of Rs 190 per 40 kg but not at Rs 260. Sugar mills cannot continue crushing with only 70 trolleys as the requirement is 500 trolleys per day for sustained operation of the mills.
"If there is no continuity in supply of sugarcane to the mills, they cannot sustain their operation," he continued. Mills in Faisalabad, Sargodha and Jhang have suspended crushing. However, crushing in South Punjab is in progress as sugarcane is sufficient and is available at Rs 190 per 40 kg. However, sugar mills which do not have required quantity of cane have stopped crushing. The mill of Jahangir Khan Tareen - second in command in PTI - in Khanewal has also halted crushing due to non-availability of sufficient cane. The Punjab government has been clearly indicated that mills will restart their crushing if they are economically feasible. Those who also installed power plants have also halted their operations being uneconomic.
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