All govt measures are unilateral, unjust PSMA paints grim picture sugar industry



Staff Reporter

The Pakistan Sugar Mills Association (PSMA) has expressed disappointment over the unilateral measures taken by the government, regretting that the government is spending millions of dollars on the import of sub-standard sugar rather facilitating the local sugar industry.

“This is tantamount to destroying the local industry and discouraging foreign investment.”
Pakistan Sugar Mills Association (PSMA) office-bearers including its Chairman Zaka Ashraf, Punjab Zone Chairman Chaudhry Aslam and Senior member Chaudhry Muhammad Waheed expressed the views during a meeting held here.

They were of the view that local sugar is being sold in the market after paying all government taxes while the imported sugar was given a tax-free corridor, adding that apart from it, the government is also offering a subsidy of Rs24 per kg on the imported sugar.

They pointed out that recently, the Competition Commission of Pakistan (CCP) has imposed a fine of Rs44 billion on the sugar industry which is the highest in the country’s history ever imposed on any industry.

This whopping amount has perturbed the mill owners and their shareholders, and they have started thinking to switch to some other business.

They claimed that amendments have been made in the laws and a clause of imposing Rs5 million fine on a daily basis has been added to it if the sugar mills fail to start the crushing season ahead of its stipulated time.

Moreover, a separate clause of registration of cases against the sugar mills has been added if the sugar mills do not pay the farmers within 15 days.

The PSMA stalwarts said that the Federal Board of Revenue has opened cases of last 5 years without any legal reasoning and procedure as these cases were already settled.

Moreover, a fine of Rs18-20 billion has been imposed which is much higher than the actual price of the sugar mill.

They alleged that at present, the Punjab government is reluctant to give a No Objection Certificate (NOC) to sugar mills despite the fact that the mills have cleared all the dues of the farmers.

This delay in NOC has prompted the banks to raise objections on giving Working Capital to sugar mills. If the mills do not secure the Working Capital on time then on-time payment to sugarcane farmers will become difficult.

They explained that everyone is well aware of the grim situation the sugar industry of Pakistan is facing for the last few years.

There are at least 80 groups in the sugar industry and they are all industrialists who have no concern with the politics.

We time and again tried to contact government high-ups for the resolution of our grievances but to no avail. Today, we are bringing our grievances before the government through media.

This year, the price of sugarcane was fully paid. The farmers were disbursed the payment at the rate of Rs375 per 40 kilogram despite the government’s fixing the price at Rs.200 per 40 kilogram. In this way, an average cost per 40-kg stands at Rs270 which is still Rs.75 more than the government’s fixed rate.

All these elements jacked up the price of sugar to Rs.104 but the government set the price at Rs.84.75, inflicting huge loss to the sugar mills.


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