PSMA asks government to immediately buy its 0.3 million tons of sugar
ISLAMABAD (April 30, 2011) : The Pakistan Sugar Mills Association (PSMA) has requested the federal government to immediately allow buying of at least 200,000 tons to 300,000 tons of sugar to facilitate timely payment to sugarcane growers.
In a statement issued here on Friday, Javed Kayani of PSMA said that this year the production has surpassed all previous estimates and the final figures that have been received from the member mills show that Punjab produced 2,576,229 tons, Sindh 1,300,000 tons and KP produced 262,120 tons, with total 4,138,349 million tons of sugar.
He said that sugar is produced in a specific period only when the sugarcane is available and is sold throughout the year, and there is no way to dispose of the surplus outright. He further elaborated that during the crushing season, mills continue to sell and avail financing against pledge of sugar. This year, about 44 million tons of sugarcane has been crushed and at an industry average procurement price of about Rs 200 per 40/kg, the total quantum of payment works out to be around 220 billion rupees, out of which 190 billion has already been paid, and the remaining 30 billion is yet to be cleared to the small growers.
He said that there is a tremendous pressure on the industry to clear these outstanding payments, and the only way it can be expedited is through purchases by the government to build a further strategic reserve with Trading Corporation of Pakistan as price of sugar is around Rs 62-63 ex-mill, which is the lowest in the world compared to landed cost of the imported sugar.
Javed said that despite PSMA’s repeated requests to inter-ministerial committee on sugar, and PSMA’s presentation to Finance Secretary for the disposal of surplus stocks, no decision has yet been made by the ECC on this very important issue, which can lead to a law order situation. This would also ensure that strategic reserves are also maintained to meet with any emergency in the country and sufficient quantity shall remain available for timely offloading as and when necessary.