Pakistan Sugar Mills Association (PSMA) chairman Mian Shahid Shafi has said that sugarcane prices have increased to a phenomenal extent and the industry was not in a position to recover the cost of sugarcane even at higher sugar rates. In a letter addressed to the government, Mian Shahid Shafi said speculators and hoarders have increased the sugar rates in futures market in view of shortage in sugarcane. As a consequence, farmers have choked supply of sugarcane to mills and suspended harvesting, which was a serious cause of concern and has given impetus to imbalance in supply and demand.

Mian Shahid Shafi said the situation warrants shut down as the industry has lost its viability and even at present recovery level in Punjab we can not recover the cost of sugarcane despite the fact that sugar market rates seem pretty attractive to the outside world.

He asked growers to restore supplies at reasonable rates and rollback from the present level of Rs80 per 40kg, which has jeopardised the operation of sugar industry.

According to him sugar industry wants solution to problems in a long-term basis to bring an end to this unhealthy practice once for all.

He reminded that war on sugarcane price was continuing from day one of the crushing season making it difficult for the industry to produce sugar for the local consumption at some reasonable price.

He said the government should intervene to convince growers that they should continue with their normal sugarcane supply till the end of the crushing season as short supply can result in suspension of crushing season.

Copyright Business Recorder, 2005