The sugar wars continue.

Byline: Mohammad Hussain Khan

A decline in sugar cane crop acreage is being anticipated in Sindh this year. Still, sugar factory owners and sugar cane growers hope for better per acre yields largely due to the monsoon rains which had a positive bearing on the crop.

A Sugarcane Control Board meeting - chaired by the agriculture minister on October 18 in Karachi - to fix a minimum sugar cane price remained inconclusive. Millers disagreed with the rate of Rs250 per 40 kilograms demanded by growers. They, however, indicated they would start crushing from November 15.

For the last six years, the Sindh government has been fixing the price at Rs182 per 40kg of sugar cane under the Sugar cane Factories Control Act. Farmers disagree with such a price saying it is unviable given their cost of inputs; the federal government has also withdrawn subsidy on fertilisers. Therefore, the price should not be less than Rs250 per 40kg.

But the millers contend that the government fixes sugar cane's indicative price whereas the rate of sugar is not fixed and for them, even the rate of Rs182 per 40kg is not affordable given the cost of sugar production. They want the government to fix sugar's price as well.

Farmers demand a rate of at least Rs250 per 40kg whereas the Sindh government has been fixing it at Rs182 for the last six years

The act primarily talks about fixing sugarcane's minimum possible price per 40kg rate. Pakistan Sugar Mills Association (PSMA) Sindh zone chairman Dr Tara Chand points out that millers don't object to a reasonable hike in sugarcane's price. But, he says, the government must take into account the factors relating to sugar's ex-factory per kg price. 'Government doesn't consider it and given its constraints, the sugar industry resists the sugar cane price', he said.

In 2014, the millers had challenged section 16 of Sugar Factories Control Act 1950, which empowers the government to fix the minimum price of sugarcane, in the Sindh High Court (SHC). But the court had rejected the millers' joint petition.

Dr Tara Chand says when the industry demanded permission for sugar exports a couple of years back to clear its carryover stocks, the government disallowed it as a policy decision, even without a subsidy. But then a subsidy was announced.

'When millers challenged the rate of Rs182 per 40kg in court in 2018, the ex-mill price of sugar was Rs48-49 per kg, but now it has increased to Rs66 per kg or so. There is a difference of at least Rs10 per...