Base price of sugar: 'government's acceptance shows effective role of PSMA'

Outgoing Pakistan Sugar Mills Association (PSMA) Punjab Zone Chairman Javed Kayani has said that acceptance of base price of sugar at Rs 19 by the government indicates that the PSMA has played its role effectively by presenting relevant data and other factors which directly affect the cost of production.
He termed it prudent and pragmatic, which in his opinion would serve the interests of all the stakeholders. Kayani has completed his two-year term as PSMA Punjab Zone chief.
Javed Kayani said that the price of Rs 19 announced by the government could be construed as a benchmark for determination of sugar prices in view of future sugarcane prices.
He said during his tenure the most daunting challenges were disposal of surplus stocks of about 600,000 tonnes and timely payments to growers, which were stuck due to surplus.
Javed Kayani said the association achieved success in convincing the government to evolve a mechanism of buffer stocks.
As a consequence, the government intervened through the Trading Corporation of Pakistan (TCP) to ensure timely payments to the growers and stabilisation of sugar price.
The commodity was selling at lower than the break-even price due to surplus stocks.
The minimal inventory in mills would facilitate commencement of crushing season on time.
Referring to an initial offer for sale of 50,000 tonnes of sugar, he said, the most appropriate time for the disposal of TCP stocks would be after the production figures are firmed up for the next crushing season, as all domestic and international reports about the crop and likely production of sugar predict a genuine shortage of about 16 percent, which means the industry will end up with a maximum of 3.2 million tonnes of sugar.
The consumption trend has also been on the increase, therefore, it would be better to arrest the price hike in May and June next year.
Javed Kayani also said that the buffer stock would suffice during the shortage next year and there would be no need to import sugar.
He said India would also begin to float inquiries for sugar in February, which would escalate the international prices of the commodity.