University of Lahore (Lahore Business School)
Muhammad Nabeel BBA02103078
Muhammad Nabeel BBA02103078
We would like express our sincere thanks to Sir. Talal Khalid for guidance and supporting in making this report effectively. We hope you will find this report as a valuable asset while studying Pakistan economy. Needless to add that we will look forward to your valuable feedback including the grey areas so as to incorporate them.
Sugar Crisis Reality:
Sugarcane is one of the most valuable crops in Pakistan. According to the Food and Agriculture Organization of United Nations FAOSTAT, Pakistan is the 15th largest producer of the sugar in the world, and 5th largest in the term of area in sugar cultivation. The sugar industry is the 2nd largest agro based industry which consists of 86 sugar mills. Sugar industry is the second largest after textile. Sugar sector makes up 4.2 per cent of manufacturing. Its shares in value added of agriculture and GDP are 3.4 percent and 0.7 percent respectively. According to the ministry of Industry and Production total crushing capacity of the sugar mills is about 505,000 tons. According to USDA Pakistan Annual sugar report state that total per capita refined sugar consumption is estimated at 25 kilograms and it is based on strong demand and improved supply. Sugar has increased from 2.89 million tons in 1995-96 to 3.95 million tons in 2005-06. One of the many reasons behind that increase is rise in the total population of the country, which has reached 170 million. The per capita sugar consumption data shows that it has also risen from 22.2 kg in 1995 to 25.8 kg in 2004-05. In 2008-09 the overall sugar consumption is forecast at over 4 million tons. Pakistan's 86 sugar mills have capacity of producing 7.0 million tons of sugar annually. Pakistan's 2009/10 sugar production is being forecast at 3.65 million tons up three percent from the current year estimates of 3.56 million tons, according to the USDA foreign Agriculture Service.
The sugar Industry employs over 75,000 people including management experts, technologists, engineers, financial experts, skilled, semi-skilled, and unskilled workers. Sugarcane is the raw material for the sugar industry. It is the vital ingredient in most of our consumption like soft drinks juices, tea, biscuits, bakery items, deserts, pharmaceuticals etc. At the time of independence in 1947 there were only seven sugar mills in Pakistan, five in East Pakistan and two in West Pakistan. The output of these factories was not sufficient to meet the domestic requirements. The country started to import sugar from other countries and the government was spending a huge amount for this, the government setup a commission in 1957 for the development of sugar industry. The first mill was established at Tando Muhammad Khan in Sindh in 1961. By 1980 there were 35 sugar mills in the country capacity of providing 1.0 million tones. After that 10 more sugar mills were installed by 1990 and the production capacity reached 2.0 million tones. With increase in population the per capita demand rise high and the number of sugar mills increased to 86 in 2009. In 2009 sugarcane is grown over a million hectors and gives the raw material to sugars mills. Sugarcane is an important industrial crop in Pakistan and it produces valuable products like sugar and ethanol (used as fuel) etc.
Sugar prices have risen because of the demand supply situation. The supply in the market is not enough to meet the current demand because increasing amount of land is being used for crops other than sugarcane, hoarding of sugar by...
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