Sugar Industry of Pakistan

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| SUGAR INDUSTRY AND THE CURRENT SUGAR CRISIS IN PAKISTAN|
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4/15/2010| BUSINESS ECONOMICS PROJECT|
| “The accouterments of [Pakistan's] state power and prestige ring hollow when people are dying in their search for food”AbstractPakistan is the 15th largest producer of sugar in the world, 5th largest in terms of area under sugar cultivation and 60th in yield. The sugar industry is the 2nd largest agro based industry which comprises of 83 sugar mills. With this scenario, Pakistan has to import sugar which exposes it to the effects of shortage and rising prices in the world.As is true in many countries, the Government of Pakistan is heavily involved in the sugar industry, regulating mill construction, trade and prices, and influencing farmers' crop decisions in various ways. One reason for the large government involvement with sugar is the political importance of the crop. Sugar is also the second most important cash crop in Pakistan after cotton. Self-sufficiency in sugar is a goal, but one that to date has proven illusive. The major sugar crop is sugarcane. 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. 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. Till now it’s not been cleared that is the current crisis manufactured/fake shortage or is it real and unavoidable.ACKNOWLEDGEMENTSThis report owes its final shape and form to the assistance and hard work of many people but first of all we would like to thank Almighty ALLAH. We as a team would especially like to thank Mr.Jawad Durrani, and Mr.Dayyam Siddiquie, who gave their valuable time and help to shape this report. Also our teacher Ms.Farhana Rehman, that without her help this would have been utterly impossible and our families who gave constant encouragement to uplift our enthusiasm. OVERVIEWThis report is a research report, intended for all teachers and students of economics. The nature of this report is analytical. We have analyzed the sugar industry of Pakistan and the ongoing sugar crisis. In this report, we have discussed numerous statistics relating to sugar in Pakistan, including the amount of production and demand, the number of sugar mills present, sugar’s impact on Pakistan’s economy, specifically its effect on the GDP, as well as statistics behind employment in the sugar industry. We will also go in depth about the sugar crisis, including its causes as well as possible solutions.| Contents

Abstract2
ACKNOWLEDGEMENTS3
OVERVIEW3
Introduction6
Introduction to report6
Overview of the sugar industry7
Production9
Production Policy9
Production of sugarcane10
Production of Sugar & Supply14
Demand & Consumption17
GUR20
Prices and cost of production of sugar21
Trade and impact on economy24
Employment level in the sugar industry26
REASONS/FACTORS BEHIND THE CURRENT SUGAR CRISES27
1) LATE OR NON-PAYMENT TO THE FARMERS & ITS RESULTS27
2) MAN MADE CRISES & SUGAR INDUSTRY PROFITEERING27
3) SMUGLING OF SUGAR AS “GUR”28
4) WATER FOR IRRIGATION & ADVERSE WEATHER CONDITION28
5) MONOPOLY OF PAKISTAN SUGAR MILL ASSOCIATION (PSMA)29
6) GOVERNMENT MISMANAGEMENT29
SOLUTIONS FOR THE CURRENT SUGAR CRISES30
1) PROPER AGRICULTURE POLICY30
2) INVESTIGATION COMMITTEE30
3) MONOPOLY CONTROL AUTHORITY30
4) STRICT ACTIONS AGAINST HOARDING31
5) PAYMENT DISPUTE31
6) AGRICULTURE DEPARTMENT31
7) SUGARBEET31
8) ANGRO RESEARCH INSTITUTES32
Conclusion33
Bibliography34

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