At present, the country is facing a crisis of sugar, with higher prices and shortages, and the government is forced to further import the commodity and will have to spend a huge amount, in view of the shortage of the commodity world-wide. This is, in fact, lack of planning and delay in decisions by the concerned authorities.
The PSMA Sindh, during July 2008, estimating the shortage had requested the TCP to import 700,000 tons of raw sugar, before the start of season, so that sugar mills could process the same, during the season and overcome the shortfall. Raw sugar is always cheaper than white sugar and may have resulted in lesser payment of foreign exchange. But the TCP took no action and the government, at a very late stage, decided to import white sugar at a very high price.
The cost of production of sugar was also high in view of the very high price of sugarcane fixed by the provinces, and due to the shortage of crops, mills were supposed to pay a high price than the minimum price fixed by government. If it is assumed that the mills paid Rs 115 per 40 kgs of cane, the cost of production works out after taking the credit of molasses into account to be not below Rs 45000 a ton.
If you add marketing cost and margin of profit, the price would not be less than Rs 50 a kg. How can one assume to sell the product at a lower cost. The solution is to bring down the cost of production by increasing per acre yield, better recovery and linking the cane price with the price of sugar. I have 40 years of experience of the sugar industry and have been dealing with these issues throughout my career and in my opinion, a solution should be found before it is too late.
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