Sugar cane growers are withholding sugarcane from crushers in Sindh and demanding
a higher support price. Out of 27 mills in the province a fifth have already suspended
crushing. “Mills at present are running at 20-25% capacity owing to mediocre
supply of sugarcane from the growers as compared to 65-70% capacity during normal
supply,” sources said.

Sugar demand has picked up due to Ramazan, but now dealers cannot get regular
supplies from the mills. Wholesale prices have not yet impacted retail levels
but imports have increased due to this spat between growers and millers. Over
100,000 tons, a fifth of the amount allowed by the government, have already been
imported, mainly from India, and more is in the pipeline.

For benchmark 8.7% sugar recovery sugarcane, the government has fixed a guaranteed
support price for Sindh farmers at Rs 0.90 per kg, but after assessing the situation,
millers have upped the price by 25%. Growers, however, are still demanding Rs
1.50-1.75 per kg.

A PSMA spokesman said millers have suffered colossal losses by burning furnace
oil, besides bearing various fixed costs. He said suspension of sugarcane supply
by the growers is not in the interest of any real stockholders, as it will create
disruption in normal marketing. PSMA is urging farmers to resume the supply
of sugarcane and not to be misled by those who are “bent upon breaking
the common bonds between the farmers and the sugar industry.”

By Navroz Havewala, correspondent