The beginning of the crushing season in Punjab has come to a standstill because sugar mills have refused to commence operations despite government orders to do so starting on November 25. The Punjab government announced an Rs300 per 40kg support price for sugarcane on Friday and directed that crushing for the season 2022-2023 begin before November 25. Although they stated they were prepared to face the legal repercussions in this regard, sugar millers refused to begin crushing unless they were given the authorization to export excess sugar.
Scandals of massive gains being made illegally in the sugar industry have occurred frequently in the nation, even under the previous administration.
An inquiry panel was established during the previous administration as well, but even before that, nothing was done to hold the guilty parties accountable. In this case, it has more or less been happening, mostly due to the extensive involvement of our powerful classes, including politicians, in this highly lucrative industry. When there was a shortage of sugar in the nation, large amounts of sugar were exported without being inspected first and imported at very exorbitant rates. As a result, the price of readily accessible sugar increased from 55 rupees per kg to 120 rupees, and even when the supply of sugar resumed normal operations, it remained at or above 95 rupees per kg.
While the government is preoccupied with other matters, the mill owners are requesting permission to export up to one million tonnes more sugar than what is needed for domestic consumption. The suggestions for the export and availability of sugar will be discussed at a meeting of the owners of sugar mills. Although the president of the Sugar Mills Association Punjab has already demanded that the official price per kg be raised from Rs. 85 to Rs. 110 before the export of sugar, as the support price of sugarcane has increased, the mill owners will give an assurance that the export will not cause a shortage of sugar and an increase in price in the nation. Where the local price will move following the export of a million tonnes can be predicted. To prevent sugar prices from rising, the government should prioritise the interests of the general public over those of mill owners.
The problem can be solved by finding a middle way. If the government is adamant about not allowing exports, then let the crushing season begin in December or January. The government may hire an impartial foreign auditor to settle the matter once and for all if it does not accept the millers’ statistics or the price of producing sugar. Also, the government can hold 500,000 tonnes of sugar and allow the remainder of the surplus to be exported if it felt the need to do so for political reasons.