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Rs10/kg subsidy on sugar: Sindh millers halt cane crushing

Rs10/kg subsidy on sugar: Sindh millers halt cane crushing

KARACHI: Worried over the production cost of Rs60 per kg of sugar against its sale price of Rs49 per kg, more than 30 sugar millers have stopped sugar production. They are demanded a cut in current sugarcane support price, or Rs10 subsidy on their production costs.

According to reports the sugar millers have suspended sugarcane crushing for an indefinite period. The production will remain suspended unless the government cut cane prices or grants at least Rs10 per kg subsidy on sugar production.

The mill owners have demanded to revise the sugarcane support prices to Rs155/40 kg in the province from Rs182/40 kg. This price millers said is unplayable as sugar prices in the domestic market have fallen leading to mounting losses.

“We are unable to keep continue production…the cost of production is much higher than our sales price,” the miller said.

The sugar millers in Sindh have twice approached the Sindh High Court at the start of current sugar production season but failed to get any relief on pricing issue. Pakistan Sugar Mills Association (Sindh Zone) has decided to file a case in the Supreme Court of Pakistan after the Sindh High Court dismissed it plea on December 30, 2014.

The country’s sugar consumption stands at around 4.6 to 4.7 million tonnes and it started the 2014/15 year with around 800,000 tonnes of stock. The season the country is expected to produce 5.7 million tonnes of sugar. The association had proposed the government to allow export of 1.5 million tonnes this season, which includes export of 500,000 tonnes with immediate effect and export of another one million tonnes at the end of the crushing season. The government has so far allowed export of 650,000 tonnees of surplus sugar and has incentivized the export by giving a subsidy of Rs10/kg. Sugar millers want subsidy on total production this season instead of allowed export quantity.