Friday Jan 08 2021

Punjab govt lays blame on sugar mill owners for price hike

Sugar cane being offloaded at a mill. File photo
  • Mill owners reject govt claim of price hike
  • Cane commissioner's office says mill owners not providing them with data of their sales
  • PSMA denies claim of not sharing sugar sale data with government 

LAHORE: The Punjab government on Thursday laid the blame on sugar mill owners for ‘artificially’ raising the price of the sweetener.

“Most of the sugar mills are involved in hoarding and black-marketing of sugar. They are not selling sugar and are thus artificially jacking up prices to mint money,” said Punjab Cane Commissioner Zaman Wattoo.

Following the claim, the sugar mill owners rejected the allegation of the provincial government.

“Do a survey of the market to know sugarcane price being offered to farmers. See, if the price of sugarcane is higher, the cost of sugar will naturally tend to increase accordingly,” Waheed Chaudhry, executive member of Pakistan Sugar Mills Association (PSMA) told The News.

While President of Pakistan Kissan Ittehad Khalid Khokhar said that the farmers are getting Rs215 to Rs250 per maund of sugarcane against the official price of Rs200.

“However, now from today, sugar mill owners have formed a pool to lower price of sugarcane to Rs200, which is a sheer injustice with the growers,” Khokhar said.

Read more: Sugar prices skyrocket in the beginning of 2021

The farmers have said that they are wary of the policies being pursued by sugar manufacturers, adding that the millers have created a pool to reduce the price. They added that there was no need to enhance the price of sugar as mill owners are currently offering little premium on sugarcane to farmers.

The cane commissioner office said that it has ordered mill owners to provide data of their sales, adding that the mills were "dilly-dallying".

“Such an act clearly shows that they are involved in selling sugar off-the-book. By doing so, they are earning hefty profits on one hand and evading sales tax on the other,” Wattoo said.

But the PSMA denied the claim of not sharing the sugar sale data with the government.

“The tax collection body is there to monitor the sugar supply chain so there is no question of evading general sales tax. Even the FBR asked the cane commissioner to depute his staff at sugar mills,” said Chaudhry.

Since Cane Commissioner’s office is not mandated to take action against hoarding or profiteering, it will analyse the information of sale once received and sent to concerned government agencies for action. 

Read more: CCP says Tareen's JDW mill played a key role in creation of sugar 'cartel'

“But what can be safely said is that this is an artificial shortage caused by some of the unscrupulous sugar millers and the hoarders,” commissioner Wattoo said.

The provincial government notifies the minimum support price of sugarcane before the start of every crushing season in accordance with Punjab Sugar Factories Control Act 1950.

The mills are bound by the present government to start crushing season in the first week of November through an ordinance.

According to the law, the sugar mill owners are required to make payment of notified sugarcane price to the sugarcane growers within a prescribed time after delivery of sugarcane.

Read more: Mill owners work together to create sugar crises, Competition Commission finds

Market insiders said the case of mounting ex-mill sugar price in the middle of the crushing season has been unheard of as there is no real basis on which price of sugar can be increased.

Not only harvesting of sugarcane continues satisfactorily but sugar demand is low this year due to restrictions on commercial and social activities due to COVID-19 outbreak, they added.