Though the sugarcane crushing for the 2018-19 season is all set to commence in about a week's time, yet 45 sugar mills of Punjab have rejected the purchase price of sugarcane fixed by the government at the rate of Rs 180 per maund (40 kg) and said the price would ruin the sugar industry.
In a statement, Pakistan Sugar Mills Association (Punjab zone) said that at that purchase price of sugarcane, their production cost of sugar would increase to Rs 63 per kg which would be a net loss of Rs 15 kg to the sugar mills as compared to the current sugar price in the local market.
They demanded of the government to link the sugarcane purchase price with the price of sugar on the local market and pay the outstanding export subsidy of Rs 16 billion to the mills if it wanted the mills to start the crushing season on time.
The mills further demanded the government should allow export of one million tons surplus sugar without any condition and collect sales tax on the actual price of sugar in the domestic market instead of Rs 60 per kg to lessen burden on the millers and the consumers.
On the other side, the farmers associations and market players say that the sugar mills' demands had made commencement of the crushing season uncertain as the millers had rejected the purchase price of which the Punjab government had issued the notification as required under the law to start the crushing season.
Growers say that late start of crushing season increases their production cost and delays sowing of wheat crop. Every year growers had been left at the mercy of the powerful lobbies of millers, many of whom pay far lower than the set support price for sugarcane.
The governments policies have been in favour of the sugar mills as billions of rupees have been doled out to them as export subsidy without any benefit to the growers.
The farmers believe that the fixed price would not even cover their cost of production which they put at around Rs200, owing to hike in prices of inputs like urea, pesticides, diesel and other costs.