Thursday, April 28, 2011

Hyderabad Sugar Industry Its Problems & Prospectus

1. Introduction:

Sugarcane contained a sweet tasting liquid and could be use in the preparation of food. Sugar cane found in the tropical and semi-tropical regions of the world where it can grow up to five meters in height. The tropics provide the ideal conditions for sugar cane growth. The hot sunny days combined with heavy seasonal rainfall result in the humid conditions that allow sugar cane to thrive.1 Sugarcane is an important cash crop of Pakistan. It is mainly grow for sugar and sugary production. It is an important source of income and employment for the farming community of the country. It also forms essential item for industries like sugar, chipboard, paper, barrages, confectionery, and uses in chemicals, plastics, paints, synthetics, fiber, insecticides, and detergents. Sugarcane production in the country has increased over time. In 1988, the area under sugarcane was 841.6(000) hectares, which increased to 1155.5(000) hectares in 1998-9 and sugarcane production increased for 33028.8 (000) tons in 1988 to 47244.1 (000) tons in 2004-05. Despite expansion in production over years, increase in the productivity per unit of area has been very low in Pakistan. The average sugarcane production in the country required static between 45-50 tons/hectares, which is very much low compared to the cane production by other countries. The average yield of sugarcane in the world is around 60 metric tons/ha, while India getting around 66 tons/hac and Egypt getting around 105 tons/hac, respectively. In this way, Egypt with highest cane yield in the world is getting about 12-14 percent high-yield than Pakistan. India with almost similar soil and climatic conditions is obtaining about 53 per cent higher cane yield than Pakistan. As it is one of the cash crops of the country, therefore, efforts should make to improve its productivity. Because of these efforts, substantial improvement can take place in its yield. Improved seed production, quality control, and distribution depend largely upon the availability of skilled and competent local manpower, which presented in insufficient in most developing countries.

2. Sugar Industry in Pakistan:

On national level, with 71 sugar mills in operations average sugarcane crushing fared at 452,137 ton per unit, a dip of 26.46% i.e., about one third Sugar production on average per mills fared at 41.156 ton decline being 26.90% Average sugarcane processing and sugar mills in Punjab fared better when compared with the averages on national level, as Sindh fared the worst on this count.

In Sindh, 28 sugar mills processed at 7,915,416 ton of sugarcane giving average crushing per mills sharply down to 282,693 tons, a drop by 39% Sugar production per mills. Declined to 26,945 tons, a drop by 38.22% at such a low level of working, hardly any unit can fare by economic viability.

In the Punjab having 38 mills functioning sugarcane crushing per unit went down by 20.38% to 599.390 ton. Sugar production on average a mills declined to 53,858 tons, representing a fall of 21.28% though the working was better than Sindh but not to a scale ensuring of a good going.

In NWF five mills processed in aggregate of 281.89 ton of sugarcane a drop of 31.77% Sugar production per mills reduced to 24,207 ton decline being 31.33%. Sugarcane is the second largest non-food crop after cotton and ranks fifth in respect of acreage. Prolonged drought and heat stress decreased its production by 22 per cent in 2003-2004, and further 17 per cent in 2004-05. Of late, there has been confrontation between growers and millers over price. Growers demand higher price for their raw material and millers complain about increase in production cost and imports. Late crushing causes dissatisfaction as well as financial loss to both, farmers and millers. Other problems are stagnant cane yield, non-payment of dues to growers by mills, and low import parity prices. A study it revealed that more than 65 per cent farmers have decreased the total area under cane production due to water shortage, behavior of the mills management, late payments, increased input cost, and diseases and rodent attack.
The price structure is such that out of the sale price some 35 per cent of the cost goes to farmer and 24 per cent to the government in taxes etc., 21 per cent to mills with nine and six per cent to wholesalers and retailers respectively. The country exports sugar at low price and imports the same at high rates.

3. Scenario of Sugar Industry :

In Pakistan, the sugar industry is largely base on sugarcane production without a nominal percentage of sugar beet. However, in the world context, sugar beet contributes about 16 percent to the sugar production. Now, for sometime past the industry has been under crisis mostly due to divergent views of the government and the sugar mill owners on the actual volume of surplus lying un-cold with the mills. Production of refined white sugar obtained from sugarcane is the largest segment of sweetening industry in Pakistan. The other traditional sweeteners are comprised of gur, shakkar and desi cheni. These traditional sweeteners are manufacture through the process of crushing cane to extract juice and treating in different ways, including heating.

4.By-Products:

These comprise molasses, bagasse and processed molasses which is the juice of what is left over of crystallized sugar. It has a good market outside the country. Domestically it is used as livestock feed, industrial alcohol and tobacco blending. Bagasse is the residue of cane after it is crush for juice. It utilized as paper and chipboard raw material.
In Pakistan farmers share looks somewhat higher. As a matter of fact, as a policy measure, it has been kept high to ensure sugarcane production at a desired level so that it may not fall short of the country's requirement. Sugarcane production largely depends on the support prices fixed by the government. Fixation and enforcement of these prices are considered necessary to make sugarcane cultivation competitive with other competing crops like cotton.
The other factors affecting the cane production include cost and availability of various inputs like fertilizer, pesticide, and irrigation water. The uncontrollable factors such as weather and change in technology also influence the cane production.
Actual of area, yield and production in Sindh fared at great deviation form the estimated Actual of area deviated much against reduction estimate being 4% in area, 20% in crop size and 15.9% in yield. This administered a deadly blow to the Sindh sugar segment. In Punjab deviation between estimate and actual was within qualification of standard, as drop in area, crop size and yield was by about 7.4% It fared well. Case of NWF zone was better than the two major zones, as crop area was up by seven percent, production up by 2.9% and yield up by 3.8%. National level represented marked relapse, as actual of area fell in arrears by about 1.8 percent, sugarcane production by 2.5% and yield remained the same.

5.Sugar Production:

Sugarcane crop for the season 2004-05 dropped drastically in all the three zones. As a result, aggregate sugarcane supply sharply reduced besides becoming intermittent, disrupting continuous process of sugar manufacturing and consequently escalating cost of production. Sugarcane price, by free marketing supply in vogue since 1987 contrasting the norms of zonal supply system adherence in almost all the countries possessing sugar industry, crop fluctuations rom season to season has become big irritant. Sugarcane price by interaction of demand and supply has usually been on rising trend, being influenced by lower than required sugarcane production, sugarcane-crushing capacity of the industry getting idle and supply system being adopted. Equation of the trio fared totally against the sugar industrial economy. If resulted in flare up of sugarcane prices. How long the norm of area specifics of sugarcane supply, despite its being key characteristics of the commodity, deserving such a system to be followed with vigor, would be ignored and allowed to sap up economic vitals of the industry and eventually the national economy.
Sugarcane price constitutes a major component as it carried 70% plus weight age in sugar production cost. So it is bound to get reflected in sugar price. This underlines role of importance sugarcane crop plays in sugar production cost and accordingly it needs to be given as much consideration in what to be the sugar market price for economic equilibrium, which enables sustainable working for the sugar industry.
Due to whopping 12.2% fall in sugarcane crop size, supplies for processing of this sole raw material to the sugar industry fell flat, dip being 26.5% to 32.102 (43.661) million ton, This sharp side affected adversely performance of sugar industry, as production dipped by 1.076 million tons, i.e. by about 27% to 2,922(3.997) million tons. Besides decline in area recovery was down to 9.10 (9.15) % for want of crop quality, its supply mechanism, bewitched by frequent interruptions,. A long haul system of sugarcane carrying to mills creating unwarranted time gap between harvest and process also affected recovery. Improvement in the system enabling instant process to harvest can give about one percent improvement in recovery, which needs to be secure rather wasted, in protecting national economic interests.

6. Sugar Industry in Hyderabad Division

There are 28-sugar mill operating in Sindh at this time. Among from them three were in public sector and reaming was in the private sector. Hyderabad division containing 19 sugar mills in the province of Sindh which had to produced 416,303 ton sugar during 2004-05 season and 413174 total cane crushed by these mill during same season which produce great impact on country economy and provides employment near about twenty one thousand people’s with socio economic development support to many peoples related to this industry. In Hyderabad division, the total area of sugar cane was 118.151 hectares in 2004-05 seasons and total cane production was 4793231 ton. The following table V-1 shows the evidence that, On the year 2004-05 Ansari Sugar mill Cane crushed 378,689 ton and sugar production is 37,782 ton and sugar recovery is 9.98 %, Army Welfare Sugar mill Cane crushed 237,339 sugar production is 23,307 and sugar recovery is 9.82, Bawany Sugar mill Cane crushed 308,689 sugar production is 28,711 and sugar recovery is 9.27, Dewan Sugar mill Cane crushed 250,562 sugar production is 23,105 and sugar recovery is 9.22, Mirza Sugar mill Cane crushed 145,189 sugar production is 13,427 and sugar recovery is 9.30, Pangrio Sugar mill Cane crushed 176,249 sugar production is 17,313 and sugar recovery is 9.82, Bachani Sugar mill is Under installation, Faran Sugar mill Cane crushed 480,072, sugar production 46,240 and sugar recovery is 9.65, Matyari Sugar mill 317,343 sugar production 30,720 and sugar recovery is 9.68, Mehran Sugar mill Cane crushed 341,738 sugar production is 32,020 and sugar recovery is 9.38, Seri Sugar mill Cane crushed 205,459 sugar production is 20,260 and sugar recovery is 9.85. Sindh abadgar Sugar mill Cane crushed 237,131 sugar production is 23,054 and sugar recovery is 9.72, T.M.k Sugar mill Cane crushed 142,868 sugar production 13,375 and sugar recovery is 9.42, Al-Asif Sugar mill Cane crushed125,588 sugar production 11,877 and sugar recovery is 9.41, Dewan Sugar mill Dewan Cane crushed 418,812 sugar production is 41,125an sugar recovery is 9.82, Larr Sugar mill Cane crushed 212,346 sugar production is 20,681 and sugar recovery is 9.74, Shahmurad Sugar mill Cane crushed 335,100 sugar production is 33,306 and sugar recovery is 9.90, Thatta and Dadu Sugar mill was Closed and goes to privatized. Total Cane crushed in Hyderabad division is 431,3147and total sugar production is 416,303

7.Sugar Season 2004-05 in Hyderabad Division

Sugar season for Hyderabad‘s industry turned more problematic than the preceding two year. As usual, sugarcane grower and their organizations fight for early start of sugar cane crushing intentionally ignoring short sized crop .It influenced the provincial authorities to announce sugarcane crushing from October 01, 2004 which fell out of economic context for the sugar industry compliance. The Hyderabad sugar mills were force to cease working from December 02 to 14, 2004 for want of sugarcane .The entire season was of disruptive spells, which eventually enhanced sugarcane price and cost of sugar production out of promotion

8.Sugar Price in Hyderabad Division;

Upsetting feature of sugarcane price persisted, compounding financial stresses, creating liquidity crunch and eroding base .On average wholesale sugar price in Hyderabad and most of in Sindh markets for the season up by Rs 5,463 per ton to Rs 22,977 per ton for the 2004-05 .season could not compensate escalation in cost of production persisted on cost front with vengeance. During 2004-05 season sugar price went up but not getting compatible with surge in cost of sugar production and its cost of sale .its fallout had to be absorbed solely by the sugar industry, As a result its liquidity dried up. Wholesale market price included sales tax at 15% plus trade commission and transport charges etc

9.Sugar Price Incompatibility

Sugar prices from December 2004 started moving up, as consequence of high cost/price of sugarcane. It was the first year after persisting falls of prices for the preceding three years. Its price trend of previous 2003-04 season was influenced by inventories pile up arising from a record production .sugar price pick up was not equivalent to surge in cost of production and cost of sugar sales, due mainly to very high sugarcane prices, arising from sharp reduction in crop size, particularly in Hyderabad division.

10. Conclusion

In Hyderabad division shortage of water and high prices of agricultural inputs has combined to make the crop non-profitable, and shortly our growers will be switching over to other short-duration crops such as rice, wheat, sunflower, and tomatoes. From many years almost all sugar mills in the Hyderabad division are running below their capacities due to a shortage in sugarcane production. Sugarcane farmers and sugar industry have a common cause to serve, it relates to economic price for raw material sugar cane and end product sugar. Sugar average recovery is 8 percent in Pakistan and 10 percent in Hyderabad division areas but the recovery is less as against 12-17 percent in other world sugar producing countries. Target of area under sugarcane crop fell to actual at 966 thousand hectare. Crop volume fell in each zone, with its drastic impact on Sindh. Similar to shrinkage in area, yield factor also fared adverse. Target set at 50.05 /Ton/hectare for 2004-05 seasons was markedly missed by 2.4% to an actual at 48.88 ton/hectare and Sugar Production target 0f 53 million ton fell by 11% to actual at 47 million ton. Crop fluctuations from season to season have become big irritant. Sugarcane price by relations of demand and supply has usually been on rising trend, being influence by lower than required sugarcane production and sugarcane-crushing. Molasses production during the review season slumped to 1.497 million ton. The income of the growers been affected, due to low yield in Pakistan. Start up date of the season made without assessment of sugarcane crop and its condition no good reason sat in price of sugarcane and sugar.

11.Recommendation

The government of Pakistan should provide right share of water to Sindh province for this important industry, which is second largest after cotton. The production of sugar can be increase with the help of new sugar verities which takes less water and give more per hectares yield. The government of Pakistan should provide cheapest fertilizer to the growers and other facilities so the grower can use right does of fertilizer to there crop then we may be able to get sufficient product. Government of Pakistan and sugar industries should introduces and import new technology for increasing sugar recovery. Government of Pakistan should use their efforts to increases the area under sugarcane crop. The government should produce new verities through research institutes or may import form India because our climate and environment is the same. Government of Pakistan should make a proper plan for achieving the sugar production and Ton/hectare cane production target. Government of Pakistan and policy makers should evaluate there polices which helps in stabling the crop size at a required level. Government and policy makers should make does police which helps in balancing the sugar demand and supply. Molasses and other by-products are totally depending on sugar production so increase in sugar production can increases bye-product of sugar. Government of Pakistan should use its efforts to increases the yield/hectares for that farmer can increase its income. Government of Pakistan should make proper assessment to insure the proper size and condition of sugarcane crop before crushing season announces. Government of Pakistan should sit proper price polices of sugarcane and sugar and implement it in a proper way

REFERENCES;

1.LATIF UMAR (2004-05) Pakistan Sugar Mills Association, Annual Report Sindh Zone, Karachi. PP.33-61.pp.100-126..

2.SHABBIR KAZMI (2006), Sugar There is a need for Comprehensive Policy, in Pakistan, Pakistan& Gulf Economist, Vol. XX, May pp. 17.

3.SHAIKH M. AYOOB (2003), Development of Sugar Industry in Sindh and its Contribution to the National Economy, Research Journal Sindhological Studies (Bi-Annual), Vol. 20, No. 1-2, pp. 31-42.

4.GOVERNMENT OF PAKISTAN (2004-05) Agricultural Statistics of Pakistan, Ministry of Food, Agriculture & Livestock (Economic Wing), Islamabad.

5.OPERATIONAL FIGURES AT A GLANCE (2007) Sugar Mills in Sindh, Office of the Cane Commissioner Hyderabad, Sindh.

6.Excise and Taxation department Hyderabad


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