As the federal and provincial governments have sided with the owners of over 75 sugar mills against the fixation of sugar price at Rs 40 per kilogramme by the court, an application has been filed in the apex court on behalf of growers and consumers to be heard on September 24, 2009.
In his petition, Mohammad Farooque Bajwa, a sugarcane grower and founder of Punjab Water Council has taken the plea that the government and the sugar mills have formed a cartel to fix unjust sugar prices and fleece the consumers. He said there are about 41 sugar mills in Punjab, 32 mills in Sindh and 7 in NWFP with the crushing capacity of six billion kilogrammes of sugarcane.
These mills approximately produced 4 billion kilogrammes of sugar during 2008-09 crushing season, which was sold at the rate of Rs 38 per kg in the open market in February 2009. This included high profit of the sugar mills and middlemen, GST, transport charges and cess, etc.
The petitioner has contended that owners or major partners of these sugar mills are influential persons whether in the government or in the opposition. He argued though the average price 40 kg sugarcane is Rs 110 per 40 kg on papers, yet the sugar millers actually pay the growers Rs 110 for 50 kg, thus cause a loss of Rs 15 billion to poor farmers with regard to weight.
The sugar mills recover the cost of sugar production ie repair and maintenance, lubricants, polybags, salaries, misc. expenses, working capital deprecation, dry age, cess, etc, by the sale of molasses which is 50 percent of whole of sugar produced.
Bajwa who is also a well-known agronomist calculated that the sugar produced during the previous crushing season did not cost more than Rs 25 per kilogramme to sugar mills. He alleged that the sugar mill owners in connivance with the government have made a cartel and played the role of sugar Mafia engaged in unethical, practices making extraordinary, abnormal profits out of sugar sale.