Non-release of stock in market: PSMA refuses to pay Rs 40 billion dues of growers

Pakistan Sugar Mills Association (PSMA) has refused to pay around Rs 40 billion dues of crisis-hit growers across the country due to non-release of its stock in the market, sources told Business Recorder on Saturday. Sugar manufacturers have refused to clear the dues owing to very thin sale of the commodity in the wholesale markets and retail shops.
Non-payment of salaries is another factor forcing the growers to switch to comparatively easy grown cotton crop from sugarcane, sources said. They said government is procuring sugar from other producing countries through Trading Corporation of Pakistan for ensuring provision of daily-use item to masses through USC outlets. "On the other hand, businessmen have also been allowed importing cheaper sugar in country, which created hurdles in the sale of local sugar stocks, sources added.
A sugar miller requesting anonymity told Business Recorder that Pakistan would be the only country around the globe, which had imposed custom duty on the import of raw sugar and exempted the finished product from any tax. Millers have requested the government to impose flexible import duty on sugar, but it is not paying heed to this issue, resulting in non-payment of growers dues, he said.
He said the manufacturers of sugar are being blackmailed by the commodity dealers in the wholesale markets and they forcibly released their stocks into the market to pay off the bank''s outstanding dues, which they borrowed for crushing season 2009-10. He said the government should step in to save the local industry from becoming bankrupt.
He recalled that the industry had recommended the government to impose 35 percent regulatory duty, which was suggested to be fixed according to international sugar prices. "Due to ignorance of the government, almost 80 percent sugar mills have become bankrupt and defaulters of sugarcane growers," he pointed out.
Elaborating reasons of hike in ex-mill price, he said the government had increased minimum support price of sugarcane up to 22 percent from Rs 81 per maund to Rs 101 per 40 kilogramme for crushing season 2009-10. Keeping shortage of the crop in view, the growers have increased the support price up to Rs 220 per maund to Rs 240 per 40 kilogramme doubling the production cost, he added.
"If the millers know international sugar price would crash after an end of crushing season 2009-10, they would not purchase sugarcane at Rs 240/40kg." Iskandar M Khan, Chairman, PSMA told Br that millers are not in a position to pay outstanding dues of Rs 40 billion of the growers along with Rs 80 billion of banks and DFIs. Due to low sale, millers could not retire Rs 120 billion dues of banks and the growers, he added.