This is with reference to the Letter to the Editor under the Subject "Business Recorder Research," by H.A. Naqvi. 1. The consumption of sugar in Pakistan is 4.3 to 4.5 million tons per year and not 3.7 million tons as Business Recorder Research wrote.
COMMENTS: Monthly sugar consumption in Pakistan is estimated to be around 0.3 million tons, according to the officials in Minfal and PSMA, which takes the annual consumption number to 3.6 million tons. In addition, our conversation with these officials revealed, that sugar consumption in Ramazan rises by 0.1 millions tons. Cumulatively, therefore, the annual number stands around 3.7 million tons.
2. The bulk of the sugar mills have already started the sugarcane crushing season from 1st/2nd week of November 2009.
COMMENTS: According to our discussions with managers of various sugar mills and the officials of the Sugarcane Growers Association, more than 90 percent of the mills did not start crushing till that time and more than 85 percent haven't as yet. Millers attribute the delay to Supreme Court's order to sell sugar at Rs 40kg, which according to them was an unfeasible price.
Now, after the expiry of the SC's order, a few mills have started crushing - but they are still working at only 20 to 30 percent of their production capacity owing to the high cost of sugarcane. See our report titled "Supremacy of sugar millers intact" dated 2 December 2009. 3. Cost of Production is around Rs 50 to 55 per Kg, as against Rs 23-25 mentioned by BR Recorder
COMMENTS: In the report titled, "Sugar imports to set the perfect stage for millers" published on November 23, 2009, the given cost of production was Rs 23-25 per kilogram. This was calculated when sugarcane was available at Rs 102 per kg, adding the cost of depreciation, packing, processing, financial charges and 17 percent GST.
And when sugarcane prices increased by Eid, on part of the growers' refusal to sell at low price levels to protest against late buying of cane, BR Research did, accordingly, increase the estimates of production cost to Rs 55 per kilogram in our subsequent report titled "Supremacy of sugar millers intact" dated December 2, 2009.
To conclude, the research and analysis conducted are based on authentic numbers and news reports, collected and discussed with industry's officials. The ground realities may indeed change after the article is published - in this case, the variation in the price of sugarcane. That is why, BR Research follows the events closely to subsequently update our readers of the changes in the circumstances if any, like we did in the case of sugar and followed up with a story on December 2, 2009.
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