By Commerce Reporter
LAHORE: Pakistan Sugar Mills Association (Punjab Zone) has said that Sugar Industry appreciates and supports efforts of the Federal and Provincial Governments of providing cheapest sugar to domestic consumers in the holy month of Ramadan and would make discounted sugar available at Rs130 through sale points to be established throughout the country.
About current sugar prices, the spokesman said that sugar prices mainly are controlled by market forces of demand and supply but sugar market sensitivities are influenced by speculators by spreading false and exaggerated news to make money at the cost of consumers, sugarcane farmers and the sugar industry. Such rumour mongering is sponsored by the stakeholders of this illegal trade which emerges as it’s sole beneficiary. The sugar industry strongly appeals to the government to uproot these elements and take action against speculators for the common good of consumers, farmers and the sugar industry.
After last year sugar exports, local prices of sugar went down and remained depressed. No sugar exports are allowed during the current crushing season. Sugar Industry of Pakistan is providing world’s cheapest locally produced sugar inspite of low sugar recovery, low sugarcane yield, highest taxation and production costs. While any imported sugar would bear a landed cost of over Rs.200 per kg as of today and is rising constantly because of shortage of crop in India and Brazil.
Inflationary trends have greatly impacted cost of production of sugar since 2021. Sugarcane purchase price is 80% of sugar cost of production whilst in the crushing season of 2022-23 alone, Minimum Support Price of sugarcane was increased from Rs 225 to Rs 300 per maund, which was a 33% increase as compared to previous year. Similarly MSP was raised from Rs 300 to Rs 425 per maund in 2023-24, an increase of 41%. In current crushing season too, the price of sugarcane has reached Rs.600 per maund. While season’s average so far is around Rs.500 per maund which is much higher than the regulated minimum support price of last crushing season.
Besides cane prices, sugar mills also have faced other increased costs due to historically high interest rates, rising minimum wages and costs of imported chemicals and spare parts coupled with carrying costs of 1 Million MT of last year surplus sugar rendering the economics of sugar mills unviable.
PSMA appreciates Punjab government’s action of partial deregulation of sugar sector and also strongly requests the Federal government to completely deregulate sugar sector to ensure survivability of this crucial agro-based industry providing import substitution worth US$5 billion. The sugar industry would be responsive to a support mechanism for the households consuming 18 percent of it’s production and deregulating remaining usage by commercial and industrial sector which itself are not liable to any governmental price controls.
