Lahore: Pakistan Sugar Mills Association, Punjab Zone officials said that due to on-going crisis, the sugar mills are likely to gone under financial disadvantage, and could lead to a default sort of situation in coming days.
The association in a letter written to Hammad Azhar, currently serving as Finance Minister said that PSMA Punjab zone, would like to bring in their notice that due to price fixation of R80/kg only by Punjab government on the country, all Provincial mills have gone into an utter financial disadvantage.
“The cost of production of sugar in Punjab based mills has gone to Rs105.77/kg due to very high sugarcane price of up to Rs350 per 40kg, though government of Punjab has kept the support price of sugarcane at Rs200/40kg”. the letter stated.
The association said that they had apprised during the crushing season through a letter on November 20th 2020 that sugarcane price is going very high because of middlemen and other factors and consequently price of sugar will rise accordingly. “However, it was replied vide Ministry of Industries and Production letter No F. No. 1 (22)/2020-CA that government cannot control the sugarcane prices due to marketing factors”.
PSMA said that we would like to add here that due to above explained situation and problems, sugar industry is heading towards crisis like situation, where most of the mills might end into default in payment of bank loans, payment to growers, Sales Tax dues, Income tax and other government dues of multifarious nature.
“Apart of above issues salaries and wages of employees will also be affected as hundreds of thousands of families are directly or indirectly are dependent on sugar industry”, the letter said.
It added that sugar, which the sugar industry is giving for poor segment of the society has in fact due to the involvement of investors is reportedly going out of Punjab.
The quantity required for Ramzan Bazars by the Punjab province’s own determination is 30,000 tons whereas Punjab government is lifting 1,55,000 tons. “This gap has given the investors incentive to get themselves involved by getting registered for quota allocation and black market the subsidized sugar in Punjab and also smuggle it to other provinces”, the letter said.
The association suggested that an emerging meeting may be held with concern departments to discuss the issue of fixing sugar price at Rs80/kg by Punjab against actual cost of production of Rs104/kg and its devastating impact on the sugar industry.
Other suggested issues are of supply chain management, as no sugar is being sold other than government of Punjab registered dealers. Tax recovery notices of billions of rupees being issued to sugar mills by Federal Board of Revenue. NAB and FIA enquiries against sugar mills and pending cane payments on sugarcane supplied by farmers to sugar mills in Punjab province/
“We hope that very early action will be taken on our submissions to rescue the Punjab sugar industry from the adversaries being faced at the moment. Any delay in redressing these issues will further add to the ongoing crisis in the industry”, the letter added.