Monday, January 24, 2011

Sugarcane price war spurs gur making

By Saleem Shaikh
January 10, 2011
TO avoid financial losses because of slow off-take of cane by sugar mills and encouraged by rising market prices, cane growers in Sindh have geared up gur making.
The protracted cane price issue between the growers and the millers is hurting the cane crushing activity and has left sizeable crop standing in the fields.
While passing through the right bank districts during last week of December, this scribe witnessed cane crop standing over tens of thousands of acres, while gur making was going on in full swing in scattered cane-growing areas.
The right bank districts of Khairpur Mir’s, Sanghar, Shaheed Benazirabad, Matiyari, Tando Mohammad Khan and Tando Allahyar are major cane-growing areas and together account for over 70 per cent of the total produce of the province.
A gur dealer, Hussain Ali Qureshi, in western Khairpur Mir’s district told this scribe on phone that on average 200-300 maunds of freshly-produced gur was being brought to local gur market in Pir-Jo-Goth of the district.
Similar reports of freshly-prepared gur’s availability in local markets from different cane-growing districts indicate low sugar production during this cane crushing season.
“Why should we sell our produce to millers who cannot pay fair just prices and often delay payments and default on our dues? So far selling cane to exploitative millers has not proved beneficial on many counts,” said Shahid Ali, a cane-grower in Sanghar district.
“I have sown cane on 450 acres this year but millers refused to pick up the produce even at Rs250 per maund.
They offered a price of Rs180 per 40 kg, which I rejected and preferred making gur,” he said.
“I have engaged my farmer tenants on daily wages for making gur. I have so far received orders for 2,000 maunds from local traders and expect more in days ahead,” he said. On reports of reduction in cane crushing, gur prices have shot up and are rising steadily,” he said.
The traders in the Karachi’s wholesale market are procuring gur between Rs3,200-Rs3,400 per 40kg. “The wholesale prices are bound to rise beyond Rs3,600-3,800 per maund in coming days, because reports of reduced sugar production have already reached the wholesale market.
In view of the scary future scenario of sugar availability, more and more gur traders and exporters are vying for procuring as much gur as possible,” said Mohammad Hanif, a gur trader in the Jodia Bazaar in Karachi.
Officials in the Pakistan Sugar Mills Association say that this time the overall crushing activity will be 60 per cent less as compared to last year.
Throughout the crushing period, the growers were unwilling to sell their cane to millers for less than Rs250 per 40kg. Some growers are demanding Rs300 per maund for their produce.
Members of the Sindh Abadgar Board (SAB) say they have reports that some millers were even obtaining cane from Punjab at around Rs230 per maund.
“Out of 32 sugar mills in Sindh, only 22 could start cane crushing till December end, while some of them had to suspend the process on account of non-availability or inadequate supplies of cane,” said officials in the cane commissioner office in Hyderabad.
Official reports indicate that overall cane crushing, which kicked off late in November, is not more than 40 per cent till December 31 as compared to that of last year.
While slamming, what most of the growers described the ‘unjustified’ cane support price, leaders of cane growers said such low prices for their produce was meant to discourage them from growing the crop any more and deprive people of the locally-produced sugar at affordable prices.
While a handful of millers are ready to purchase cane at Rs200 per 40kg, most millers refuse to pick up the crop at Rs300/40kg. They argue that purchasing cane at such exorbitant rates would push sweetener’s price up in the local market.
“If we purchase cane between Rs250-Rs300 per maund the price of sugar will soar beyond Rs120 per kg in retail market,” said an official of Habib Sugar Mills in Nawabshah. “We just want our mills running and ensure availability of sugar to consumers at affordable price.”
“This price war between growers and millers will result in low sugar production and consequently aggravate sugar crisis in the days to come, making the sweetener costlier and unaffordable for consumers,” remarks an official in the Sindh Cane Commissioner’s office in Hyderabad.
“The cane growers sow wheat in their fields after clearing them of cane; the standing cane crop means wheat sowing in the right bank districts would suffer significantly,” remarked Mohammad Aachar, agriculture department’s director for major crops.
The right bank cane growing districts together account for over 65 per cent of the total wheat sowing in the province.

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