Punjab govt issues show-cause to sugar mills over crushing delays

LAHORE: Punjab’s government has issued show-cause notices to eight sugar mills for failing to start sugarcane crushing by the official deadline, officials said on Friday.

The Cane Commissioner of Punjab has issued show-cause notices to the management of several mills, including Shakarganj-I Sugar Mills Ltd, District Jhang; Shakarganj-II Sugar Mills Ltd, District Jhang; Jauharabad Sugar Mills Ltd, District Khushab; Chanar Sugar Mill Ltd, District Faisalabad; Adam Sugar Mills Ltd, District Bahawalnagar; G.B. Sugar Mills Ltd, District Sialkot; Safina Sugar Mills Ltd, District Chiniot; and Abdullah-I Sugar Mills Ltd, District Okara, under the amended Punjab Sugar Factories Control Act of 1950.

The notices were served because the mills did not begin operations by November 30th, a date mandated by the government to ensure a timely start to the sugarcane processing season. According to Section 08 of the Punjab Sugar Factories Control Act 1950 (Amended), the occupier of the factory shall start crushing sugarcane in the following manner: Section 8 Crushing. "The occupier of a factory shall start crushing cane not later than a date specified by the Government, which shall not be later than 30th November."

Accordingly, the Cane Commissioner's office issued a letter to all sugar mills on November 22, 2023, to start crushing sugarcane w.e.f. November 25, 2023, as per the government's directions.

Citing reliable sources, the Cane Commission Punjab stated that these eight factories had not started crushing sugarcane to date. This act amounts to defiance of laws/rules, which may lead to the imposition of fines and penalties as envisaged under Section 21 of the Act, which is reproduced here:

"Any person contravening the provisions of this Act or any Order or Rule made thereunder shall be punishable with imprisonment for a term which may extend to three (3) years or with a fine which may extend to five (5) million rupees per day but shall not be less than one (1) million rupees per day, or with both."

The Cane Commissioner asked the management of these mills to respond to the show-cause notice within three days positively. Furthermore, the management of the respective mills has been asked to appear before the Cane Commissioner on or before December 04, 2023, positively. The Commissioner cautioned that an ex-parte decision shall be taken if the management of the mills fails to appear within the stipulated time.

When contacted, the spokesperson for the PakistanSugar Mills Association (PSMA) did not respond to queries about the failure of sugar mills to launch crushing as per the prescribed date.

On the other hand, Javed Kayani, former chairman of PSMA and CEO of Chanar Sugar Mills, said that the operation of his sugar factory commenced as per the official date. “We did start, but due to a lack of harvesting of sugarcane in the vicinity, the mill could not continue crushing,” Kayani said.

He added that sugarcane rates are phenomenally high at the onset of the crushing season. As against the support price of Rs 400 per 40kg in the Punjab province, he claimed, the prevailing price is in excess of Rs 460 per 40 kg.

It may be noted that the Punjab government issued a notification fixing the sugarcane support price at Rs 400 per 40 kg for the crushing season 2023-24. As per the provincial government’s announcement, November 25 has been fixed for the start of the sugarcane crushing season.

All sugar mills are required to start crushing sugarcane and making sugar from November 25. Based on the notified sugarcane rate, the sugar price may be fixed at around Rs 125 per kg for the retail market.