Fresh sugar crisis in country feared

LAHORE-The country is likely to face sugar shortage in coming months as the sugar price has surged to Rs 39 per kg here in the open market while the millers have reduced the supply to the market, dealers said on Tuesday.

The market sources also hinted further increase in the price of white refined sugar in the days to come as the Punjab govt has already enhanced the minimum purchase price of sugarcane from Rs 63 to Rs 80 per 40kg.

According to market sources, the sugar price has registered an increase of Rs 15 per kg during the last four months as its price swelled to Rs 39 from Rs 24 during April 1, 2008 to October 1, 2008, respectively.

The sugar dealers also claimed that hoarders and profiteers have jumped into the sugar business in connivance with the sugar mills to push its prices upward by creating artificial shortage in the local market.

'The sugar price is increasing with every passing day in the open market as the sugar mafia in connivance with the sugar mills owners has become active in this field', Asghar Butt President Lahore Sugar Dealers Association said, when contacted.

He said that sugar price has registered an increase of Rs 15 per kg during the last four months.

'If the situation will not be controlled, sugar price will jump to above Rs 40 during the next month,' he claimed.

In April 2008, he said, the ex-mill rate of sugar was Rs 2290 per 100 kg, which has surged to Rs 3660 on Tuesday.

He said that due to increase in sugarcane support price and expected shortfall in sugarcane production, the ex-mill price would jump to above Rs 4000 per 100-kg in the next couple of weeks.

On the other hand, sugar millers have claimed that there are great chances of an expected increase in sugar price due to the increase in the minimum support price of sugarcane for the season 2008-09.

A representative of the Pakistan Sugar Mills Association (PSMA) requesting his name not be quoted said that during the new crushing season, the price of white refined sugar would go up to Rs 40 per kg from the current price of Rs 38 to Rs 39 per kg in the open market.

He said that the country is likely to face sugar shortage in the coming months as consumption has increased to 4.2 million tonnes against the expected production of 3.5 million tonnes during the next season.

He further said that due to the increase in the cost of production of sugarcane following unusual increase in the prices of fertiliser and fuel, it had become inevitable for the govt to enhance minimum support price of sugarcane to Rs 80 per 40 kg.

He said that the increase in sugarcane purchase price would lead to further increase in the price of refined sugar.

The millers further said that they have been left with no other option but to increase the sugar price due to the increase in cost of doing business.

The sugar dealers demanded that the govt to immediately import sugar to overcome the shortage and launch massive crackdown against the hoarders and profiteers to keep the prices stable.

Meanwhile, the growers said that the sugar mills owners are responsible for the expected shortfall in the sugarcane production and the govt must take action against such mills, which delayed payments to the farmers after purchasing their produce.

The millers had stopped the payments to the farmers, which discouraged the growers during the last season and most of the farmers stayed away from producing sugarcane.

The sugar millers did not pay to the growers even after purchasing sugarcane from them. The growers were running from pillar to post to get their outstanding amount but to no avail. As a result, a great number of farmers this year stayed away from sowing the sugarcane crop due to the rude attitude of the millers', Shamshad Ali, a grower from Okara district said, when contacted.

He further said that there is 10 to 15 per cent expected shortfall in the production of sugarcane.