Rs 5 cut in sugar price expected

27 Nov, 2013

Sugar price is expected to reduce by Rs 5 per kilogram in a day or two as ex-mill price of sugar has slumped by Rs 250 per 50 kg bag since the commencement of fresh sugar cane crushing season in the country, industry sources told Business Recorder. According to the sources, government has to put strict vigilance to keep hoarders in control as in the current season bumper sugar production is expected.
Presently, carry-over stock of 0.9 tons with bumper production this year would bring sugar stockpiles to 6.4 million tons that has caused the millers to reduce ex-mill price of commodity by Rs 250 per 50 kg bag, sources said. The ex-mill price of sugar has been reduced from Rs 55 to 50 after sugar mills started producing white refined sugar this year.
"The mills are in operational mode in Sindh, producing minimum 10,000 tons of commodity every day", sources in Pakistan Sugar Mills Association (PSMA) said, adding production is being expected to touch 15000 tons per day by the end of current crushing season 2013-2014. Though Sindh has still not notified a support price of Sugar cane for the year 2013-2014, the millers in Sindh said they are purchasing sugar cane from growers at minimum Rs 172.
"It has been a practice for the last 25 years that Sindh always followed Punjab's support price for sugar cane with addition of Rs 2 per 40 kilogram. Punjab has fixed Rs 170 per 40 kg this year, so Sindh government would announce Rs 172 per maund for Sindh, said Aslam Farouqe, Chairman PSMA Sindh Zone. He said that most of the Sugar mills in Sindh have started sugar production. "Out of 29 Sugar mills, 20 mills have commenced operations while boilers have been lighted up at reaming 9 factories to start production in next couple of days," PSMA chairman said.
Sources said that sugar industry has the capacity of producing 7 million tons of sugar annually, indeed with full capacity utilisation that would need supply of 80 million tons of sugarcane. Millers fear the fresh Sugar production of over 5.9 million tons is likely to saturate the local market, as about 0.9 million tons of the commodity is still unsold, demanding of the government to increase export of the white refined sugar. They also have demanded separate pricing mechanism for domestic consumers and commercial consumers in order to facilitate the industry, growers and domestic consumers respectively.

Read Comments