Sugar mill-owners express inability to start crushing season
LAHORE: The sugar mill-owners have expressed inability to start crushing season due to the refusal of banks to allocate working capital in the absence of no objection certificates.
“The Punjab government is not issuing NOCs to mills even after payment of all the outstanding dues to the sugarcane growers. The banks are not ready to provide working capital without these NOCs. The mills cannot pay growers their dues within 15 days of buying sugarcane due to the lack of working capital,” Pakistan Sugar Mills Association central chairman Chaudhry Zaka Ashraf said, while addressing a press conference.
Flanked by PSMA Punjab chairman Chaudhry Muhammad Aslam, Chaudhry Waheed and representatives of the sugar mills, he said, the mills were not going on strike and only expressing inability to start crushing without the working capital.
Zaka Ashraf said that the sugarcane worth Rs500 billion was in the fields and the cash-starved mill-owners could not pay growers within 15 days as per the new rules.
The mill-owners would have to face criminal cases as per the new sugar factories control act if they fail to pay growers within 15 days, he said and accused the government of compelling mills to start crushing before time like last year.
The mills were asked to crush premature sugarcane last year that led to 300,000 tonnes less sugar production. Due to this, he said, the government had to import expensive sugar.
“[The] rate of imported sugar is 25 to 30 per cent more than the local produce and it only benefits foreign growers and industries,” he said.
To a question, Zaka said that the best time to start crushing season was after November 30. The start of operations of any mill should be the discretion of its owner, he said, adding that the mill-owners were compelled to do so by introducing the clause of Rs5 million fine/day on failure to start crushing on a date announced by the government.
The Competition Commission of Pakistan (CCP) had recently imposed a fine of Rs44 billion on sugar industry, the highest in the history of the country.
To a question about high sugar prices, he said, the cost of production/kilogram was Rs104, while the government had fixed the price at Rs84.75.
The mills had asked the government in the past to waive off sales tax, which would bring down the cost of production to Rs90/kilogram.
The PSMA central and provincial chairmen offered the government to appoint independent chartered accountants to calculate the cost of production to ascertain the real wholesale and retail prices.
They said the government has given a Rs18 billion subsidy on sugar import. They appealed the government to resolve these issues to save the livelihood of hundreds of thousands of families attached to this industry.
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