Lahore: Pakistan Sugar Mills Association (PSMA) has stated that some quarters are building up absurd narrative that country’s domestic sugar requirements may be fulfilled through continuous sugar imports with billions of dollars costs and resources deployed in sugarcane crop production be shifted to a particular crop.
PSMA spokesman told media here Tuesday that sugarcane is a vital crop of the country which is capable to sustain continuously-changing and evolving weather patterns. In this situation, many other crops including cotton are the most fragile crops, incapable to withhold the pressures of floods, global warming and diseases. Sugarcane is the most viable crop for the farmers both financially and climatically. Moreover, the growers are themselves prioritizing sugarcane as their primary crop due to its viability.
Pakistan is world’s 5th largest cane sugar producer and Pakistan’s sugar industry is 2nd largest agro based industry after textiles providing USD 04 billion worth of import substitution to national economy.
During a crushing season, the sugar industry generates direct and indirect business activity of Rs 1000 billion in agriculture, transport, allied industry, whole sale and retail markets. It pays around Rs. 225 billion in direct and indirect taxes to Federal, Provincial and Local Governments. The industry employs more than 100,000 labour force while more than nine million people of rural population are involved in the production of sugarcane.
Sugar industry utilizes its indigenous energy by using bagasse through which an allied steel industry has also been established and its generated power is being exported to national grid as well.
With conducive policy interventions, an industrial chain using byproducts of sugarcane would come up, as happened in many other countries. Use of Ethanol in vehicles as fuel like in Brazil and India can strengthen our national energy mix heavily dependent on imports of petroleum products. Ethanol Blending Policy (E-10) started in Pakistan in years 2006 and 2009, later discontinued for unknown reasons. Brazil is making E-80 and E-100 ethanol and saving hundreds and billions of dollars of foreign exchange, hence less fuel is being imported by them. The current domestic potential of bio-ethanol is the most cheaper solution to meet increasing high cost energy demand.
Moreover, current ex-mill rates are going around Rs. 130-135 per kg while the cost of ex-mill sugar is going above Rs. 160 per kg. With this cost, industry cannot bear even its own expenses.
He was of the view that upon deregulation, sugar industry of Pakistan can achieve annual sugar production of 12 MMT without any further investment or capacity enhancement. It can create 06 MMT exportable surplus each year and country can earn USD 05 billion through consistent sugar exports with an additional $ USD one billion through Ethanol exports annually.
Central Asian States, he added, Afghanistan and China have big potential for Pakistani white sugar which is being exploited by India inspite of our vicinity and lesser transportation costs. Exports of white sugar through an Export Facilitation Scheme or FTA with these countries would ensure better foreign exchange earnings for national exchequer.
The spokesman urged the government to implement the deregulation policy at the earliest which will be beneficial for both the farmers and the industry. If the international sugar prices are higher then the growers will also benefit from it, making it a win-win situation for both. It is hoped that like other agricultural sectors, the sugar sector will be given the opportunity to utilize its full potential for the sake of national development.
He cited that rice and maize are deregulated sectors and working well on the principles of market economy. Rice and maize growers get international prices which has encouraged investments resulting in better yield.
He suggested the government to adopt a permanent policy on deregulation of sugar sector so that it keeps contributing to national economy through import substitution, generating overall business activity, employment, tax revenue and substantial foreign exchange earnings due to regular export of sugar surplus aligned with national vision of export-led growth.