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Case of sugar mills in cotton growing areas

According to newspaper reports, the Ministry of Textile Industry has expressed the apprehensions that allowing the establishment of new sugar mills in the cotton growing areas will severely affect cotton production. The ministry has urged provinces not to issue no-objection certificates to the mill owners either to increase the capacity or shifting of their units to the cotton growing areas. The sugar prices have shown 100 percent increase during the last one decade and the mill owners are now want to expand their operations in the cotton growing areas. Currently, 45 sugar mills are operational in Punjab, 32 in Sindh and eight in Khyber-Pakhtunkhwa as the units have increased from 45 to 85 in 10 years and it is increasingly becoming a lucrative business. At least 70 percent sugar mills are already shifted to the cotton growing areas, including Rahim Yar Khan and Muzaffargarh. It has slashed the potentials of cotton areas by 26 percent and sugar mills in Mianwali will further cut the cotton production.

Despite the potentials of the country to produce sugar surplus at a large scale, the prices of sugar are still very high and benefits of subsidies are not reaching the common man. There was a time the country was proud of manufacturing complete sugar plants and was offering the world to buy sugar units from Pakistan. However, decades after the claims of self-reliance in sugar industry and sugar-cane production, the country faced shortage of this commodity many a time and even had to import it from India. The shrinkage of the cotton growing areas has already sent ripple effects to the textile exports of the country.

The country’s textile industry is now heavily depending on the Indian cotton and squeezing of the cotton growing areas will further affect this vital sector.Last year, due to growing hostile attitude of the Indian government, Pakistan suspended cotton import from that country only to restore it after few days.An officials of the Pakistan Sugar Mills Association has already rejected the claims by some lobbies that the sugar mill owners are making billions of rupees by increasing the sugar prices and production capacity of sugar mills. The body claimed that the industry is facing bankruptcy over the last few years. According to him, sugar prices are low in the international market and there is a glut in the local market, which has pressured the industry. According to the official, the sugar prices are determined by market forces but the support prices of sugarcane are fixed by government.Keep in view the current situation, it is the test case for the policymakers to adopt a balanced approach to deal with both cotton and sugar-cane crops.

2017-01-16
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