According to sources, TCP had approached sugar millers for purchasing the commodity to ensure constant supply of sugar to USC outlets at subsidised rates, but they refused to offload their stocks. "The millers have refused the offer of the TCP because of difference in rates offered due to an increase in cost of sugar production owing to abrupt increase in sugarcane cost," the sources added.
They advised the government to import sugar to meet the crises across the country, because the sugar mills have decided to offload commodity in the wholesale market. "The manufacturers of the commodity have learned a lesson from last year operation against sugar mills and have decided not to hold buffer stock within the processing units," the sources maintained.
They said the government should have imported sugar during December 2009, but it has failed to implement on "sugar policy" which was approved on November 04, 2009 to import 0.5 million tonnes refined sugar immediately. "The price of commodity has increased from 593 dollars per ton to more than 755 dollars per ton during last two months and they are demanding cheap sugar for utility stores," they said.
They said the cost of sugar production has increased up to 100 percent in just a single month due to an abrupt increase in sugarcane price. The crop is not available to the manufacturers of the commodity at Rs 100 and Rs 101, the minimum support price announced by the provincial government of Punjab and Sindh, respectively while TCP demanding sugar at much lower rates, they added.
Due to non-issuance of loans by the banks to sugar mills and an increase of 110 percent in sugarcane price, all the sugar mills in the country are running 40 percent below its maximum capacity.
"They said the citizens of NWFP would be affected due to closure of sugar mills and mass scale production of gur and its illegal export to Afghanistan," they argued. Talking to Business Recorder, Chairman Pakistan Sugar Mills Association (PSMA) Iskandar M. Khan said the Economic Co-ordination Committee (ECC) has called representatives of PSMA, MD USC and the officials to discuss the issue. He refused to comments on the issue before meeting with the government officials.