Meeting between sugarcane growers, millers remains inconclusive

KARACHI: The meeting between the sugar mill owners and the cane growers on Friday to settle the issue of sugarcane price failed to make any progress. Both the parties stood their ground, without any chance of flexibility.

The meeting was chaired by the Sindh Agriculture Minister Ali Nawaz following the order of Sindh High Court (SHC) to resolve the dispute between the cane growers and the mill owners.

The final meeting is expected to take place on Monday after which a report on the progress is to be submitted to SHC.

Sindh Government decided the rates of sugarcane for the year 2017-18 at Rs182 per 40 kg under Sugar Factories Control Act 1950 every year. However, the mill owners had earlier refused to purchase the sugarcane from the growers at the given price which resulted in a deadlock.

Sindh has a total of 32 functioning sugar mills that purchased about 22 million tonnes of sugarcane compared to 18 million tonnes 2015-16 season.

“The rate of Rs182/40kg is in no way viable for us given our cost of 1kg sugar production,” said Pakistan Sugar Mills Association’s Sindh President Asim Ghani. He said 500,000 tonnes of sugar was exported in the last year, and only Rs10.70 per 1kg rebate was allowed. He maintained that this amount of subsidy has not yet been received by the miller owners.

During the month of Ramzan in 2017, the federal government had not permitted the export of sugar amid risk of shortage at home. Later, exports were allowed with a subsidy of Rs10.70 per kg.

Additionally, the Sindh government also announced a subsidy for millers of the province. According to a recent cabinet decision, the Sindh government approved a Rs9.30 per kg subsidy for mills which would export sugar.

Provinces share 50 per cent of the subsidy’s cost that the federal government grants. So, Sindh will also pay Rs5.35/1kg subsidy as part of the Rs10.70 rebate announced by the federal government last year.

The matter was taken to the SHC by sugar millers – Mirpurkhas sugar mills and others – when they challenged the December 5 notification of sugarcane rate for the 2017-18 season, saying the rate was not viable for them.

The SHC on Tuesday had set an interim rate of the sugarcane at Rs 172 per 40 kg for the mill owners, while directed the government to act as mediator the millers and the sugarcane growers.