Layyah Sugar Mills, in Punjab, which is shutting down from December 31, confirmed that sugarcane buying at weighbridges/kandas was on the rise in Punjab and the same was the situation in NWFP.
In its letter addressed to Punjab Cane Commissioner, the management said that Layyah Sugar Mills would shut down from December 31, as it was unable to compete with middlemen who were openly buying sugarcane in its area at weighbridges/kandas and making difficult for it to get sugarcane for crushing. It added that middlemen were buying sugarcane at kandas/weighbridges and selling to the mills at high prices.
It said that under the Cane Control Act, 1950 (Para 13 (3) it wanted to bring it "into your (The Cane Commissioner Punjab) notice" that middleman was a bone of contention and a cause of pushing up sugarcane prices get irrationally higher benefit and forcing the mills to close down.
The letter said: "The middleman has been mainly dominating cane procurement by offering higher rates to the growers and our area is badly affected by this practice."
Layyah Mills letter is enough to confirm how serious are the provinces in following CBR directions and take action against middlemen.
The letter clearly mentioned that middlemen had installed unauthorised weighbridges/kandas for sugarcane purchase and this race was a cause of price competition among sugar mills.
It said: " It appears that no action has so far been taken against the middlemen who are by all means destablising the system."
Layyah Mills added that it has no option except to buy cane on higher rates to run the mills which ultimately has resulted in uneconomical crushing.
Sources said the middleman''s role was becoming critical in crushing and some of the mills, which were financially sound, buy sugarcane through the middlemen.
The middleman is hurting the growers more than any other sugar sector stakeholders.
Farmers Association of Pakistan (FAP) had voiced concern on the rising role of middleman in sugarcane buying in one of the meetings convened by Cane Commissioner Punjab a few days back. Its representative, Rabia Sultan, who attended the meeting, told Business Recorder that FAP demanded of the Cane Commissioner immediate elimination of sugarcane buying outside the mills, but nothing has been done so far to improve the situation in this area.
The Cane Commissioner Punjab, Abdul Ghafoor Bhatti, had convened a meeting to sort out the issue of sugarcane pricing but the millers did not turn up.
Rabia said: "The millers'' decision to stay away from the meeting shows that they are hardly worried about the crisis which is deepening with each passing day. They perhaps feel that the controversy is going to hurt the growers only. But, in fact, it''s going to hurt them in the long run as next year growers will prefer other crops over sugarcane and they will not have raw material for the mills."