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ANNUAL REPORT FOR THE YEAR ENDED SEPTEMBER 30, 2001

Introduction
It is my honour and a great pleasure to present on behalf of the zonal executive committee and all the members the annual report of the Pakistan Sugar Mills Association-Sindh Zone, for the year ended September 30, 2001.

The year under review fared full of events, most of them being unfavourable. These put our patience and pursuits under much stress. The members with fortified numerical strength faced odds with understanding and fortitude. Their cooperation was a great source in support of addressing some problems. Others lingering behind will hopefully be overcome in sometime by similar spirit of unity and coordination.

The membership strength of the Sindh zone improved to 25 (24) sugar mills for the year and it consisted of all the functional units, getting on the PSMA-SZ roll. It was gratifying that none of the functional units stayed out of the Association's fraternity. Five sugar mills of Sindh were non-operative and, therefore, they seem to have opted for remaining out in the cold. As and when any of them gets on stream, we hope firmly, it will get in the fraternity fold of the Association. At PSMA-SZ, we want that all the sugar mills of Sindh become fully functional and contribute to the gross domestic product. The PSMA will extend its assistance in resumption of functions by such mills on approach.

Sugar industry is playing a key role in the national economy by virtue of its being truly agro-based. Each of its member mills has design to exist in the deep rural landmass. Sugar industry is virtually playing a catalyst's role in economic development of rural sector and through it contribute in growth dynamics of Pakistan. In order to increase its contribution to the extent of potentials possessed, which remain significantly unexploited, it is imperative to pre-empt the industry from small stumbling blocks.

An obligatory membership of the industrial associations by the performing units in relevant manufacturing subsectors tends to be the initial prerequisite step in this direction, as it will promote discipline and ensure responsibility. Interaction of the industry with the government in formulation of the policy format and its effective structural administration will be facilitated by this. The ministry of commerce may take due early care in implementation of the proposal so as to eliminate lacunae existing since long time.

Sugarcane crop situation

Sugarcane crop in the country during the review season declined further. It was second year in sequence of reduced sugarcane crop size and its availability to the national sugar industry. The following table provides sugarcane crop situation on the national level as emerged during the past five years.

Area, production and yield of sugarcane

Provisional
(July-March)
Source: Economic Survey 2000-2001

Sindh province, though recognised as the most suitable for sugarcane crop cultivation, by its close proximity to Tropic of Cancer, it suffered the most and, as such, its sugar industry segment was also the worst affected.

Sugarcane crop area in Sindh increased by 8,281 hectares to 238,842 (230,561) hectares but crop size was 12,466,146 (14,290,793) tons, i.e. lower by 1,824,647 tons, attributable to a steep fall to 52.19 (61.98) tons in yields per hectare. Persisting drought conditions created such a critical situation.

Intensity of adverse conditions in the Punjab was not as much, as is seen from a sizable at 100 thousand hectares area cut under sugarcane and crop size reduction by about 941,780 tons on yields improved to 42.96 (40.64) tons per hectare. This augurs well for future of the zone as its potentials in yields improvement have not been efficiently exploited.

NWFP was an exception marking some increase in all the three dimensions, i.e. crop area, size and yield. But beaten by lower supply of sugarcane to the well set mills segment by diversion to unorganized 'gur' making crushers, coupled with lower recovery of sugar, evidencing deteriorating quality of sugarcane, it could not make the mark.

Sugarcane area, production, yield
Season: 2000-2001 (1999-2000)

As usual, higher area target under sugarcane, promising bigger size of the crop and improved quality of sugarcane were trumpeted prior to commencement of sugarcane crushing season. This has been a recurring feature, though proven of no economic advantage at any time and not serving any interest associated with sugarcane and sugar. Timely start of the season is to be determined by economic analysis, instead of indiscreet dispensation on the grounds of its being statutory requirement. Until sound practice guided by economic advantage on national level is evolved, agreed, formalised and put to work sugar industry and national economy both would be at disadvantage and so continue to suffer. National economic good ought to be the guiding criteria in the policy design, followed by its disciplined implementation. This becomes all the more indispensable in case of sugarcane crop having a short crushing campaign of about four months while sugar sales and supplies to consumers remain stretched for a year and beyond in the event of surplus domestic production or liberal imports. Inelastic demand feature of sugar demands striking balanced strategy to protect sugarcane growers, sugar industry and consumers.

Pleadings by the PSMA-SZ to the government of Sindh particularly its Agriculture Division and also to the sugarcane growers associations/chambers to hold patience in commencement of crushing campaign so as to begin the season at appropriate time sequence, in order to have fairly matured sugarcane, which would provide higher yields and also recoveries were, as usual, being given casual treat. Of the several sound reasons, one being the fact that sugarcane crop was shorter and so will be the seasonal span and sugar production need not be ignored in any case. It was pleaded that in good crop size of 1998-99 sugarcane crushing campaign did not go beyond 141 days and during the preceding season it was limited to merely 126 days spell was brushed away. Apprehensions clearly and loudly expressed by the PSMA-SZ about earlier than reasonable timing to be observed in start up of crushing was tactics meant for enhancing sugarcane prices out of context, by compelling the sugar industry to run hand to mouth and burn costly fuel of furnace oil, turned ironically true. The sugar industry of Sindh had to come to grinding halt on December 03, 2000 after beginning the season in the first week of November under pressing directives of the Sindh government. The crushing campaign, soon after its beginning got disrupted by an intervening complete closure for 15 days, from December 03 to 17, 2000 for want on sugarcane supplies. It was otherwise a prime time for the industry to get production. During three to four weeks of interrupted stoppage of operation by 'no cane' syndrome, November 2000 emerged decisively deterrent. In this about a month of operations, meager 142,273 (350,121) tons of sugarcane could be processed by 25 operating mills which produced a token 78,616 (188,635) tons of sugar at recovery dropped to 7.59 (7.98%). It could be equated dismal performance and distressing outcome of spiraling effect on cost of sugar production. Its dark disturbing shadow stretched over the entire season. This .was :an unfortunate exceptional event which the PSMA-SZ wanted to avert it by information gathered in advance about what was going to happen ! Correct counsel of the PSMA-SZ was ignored by the authorities.

Sindh sugar industry's concern of short crop culminating into short supply and curtailment in the crushing spell were precise. Its evidence emanated in the forms of sugarcane crushing declining to 10,495,339 (10,856,757) tons, sugar production lower at 968,175 (996,317) tons, though recovery inched up to 9.22 (9.18)%. The trend proved a costly affair for the Sindh sugar industrial subsector.

Punjab zone fared better. There sugarcane crushing increased to 18,061,367 (16, 829,610) tons, sugar production to 1,437,505 (1,315,637) tons, with recovery paddle up to 7.88 (7.82)%. Improved crushing quantum and recovery were both in support in attaining a higher sugar production.

Higher sugarcane crop notwithstanding in NWFP zone, its sugar industry starved of sugarcane requirement, attributable to accelerated diversion of valuable sugarcane crop in crude operations of 'gur' making. Sugarcane crushing dropped sharply to just 847,015 (1,296,344) tons, pulling sugar production down to 61,163 (102,792) tons, with recovery also rolling down to 7.22 (7.93)%.

An improvement in sugarbeet slicing up at 226,252 (187,478) tons, fetching 17,276 (14,618) tons of sugar, contrasted by recovery down to 7.64 (7.80)% could not compensate for sizeable loss in aggregate of 41,629 tons to 78,439 (117,410) tons, combined of sugar production from sugarcane and sugarbeet. Irrefutably sugar subsector of NWF zone was back to bitter turmoil which it faced during 1994-95-96 seasons.

Operational features
Zonal sugar production, season: 2000-2001 (1999-2000)

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