Economic Challenges for Pakistan Sugar Industry

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Table of Contents

  • Role of Sugar Trade within the Economy
  • Findings and Discussion (Challenges)
  • Sindh
  • Punjab
  • Conclusion and Recommendations
  • References

Sugar in Pakistan is made from cane and beet, even though cane is the principal – and overwhelming – uncooked material used. There's approximately 1 million hectares of land beneath cane and beet in four provinces: Punjab, Sindh, North West Frontier Province (NWFP), and Baluchistan. Punjab and Sindh, cane-growing regions, make a contribution with about 90 percentage of the overall place and production. Sugarcane in Pakistan is grown on about 1.2 million hectares and offers ninety sugar generators. The sugar enterprise is the USA's 2nd largest agriculture-primarily based commercial enterprise after textiles. many of the provinces, Punjab debts for sixty five percentage of sugarcane vicinity, Sindh 25 percentage, and Khyber Pakhtunkhwa 10 percentage. The Sugar enterprise employs over 75000 people, inclusive of control specialists, technologists, engineers, financial specialists, professional, semiskilled and unskilled workers. It contributes around four billion rupees only under the head of excise obligation and different levies to the government also are paramount significance.Pakistan is the 4th biggest many of the sugarcane generating countries inside the global.Sugar beet is grown and processed inside the North West Frontier Province (NWFP).The authorities has proposed the enlargement of beet sugar to reinforce the enterprise however has met opposition from the millers who argue that maximum of the cane factories are not prepared for processing beets, new funding is high priced and seeds would ought to be imported. The authorities has performed beet-growing experiments in 15 places in Sindh and Punjab and suggested encouraging outcomes. In October 2001, the minister of agriculture stated the experiments concluded that beet cultivation in Sindh calls for about 35 percent of the water demanded by way of the cultivation of sugar cane, and about 60 percentage within the case of Punjab – with water resources being scarce within the USA. The crop is ready for harvest in four to five months and beet lets in intercropping. The experiments would continue inside the close to destiny to company up fundamental pointers for beet cultivation and to decide approaches to introduce it within the agriculture of Sindh and Punjab. Pakistan has additionally established hyperlinks with Poland to trade technology and expertise in sugar beet cultivation and processing. Poland has a large and skilled sugar beet enterprise.

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Role of Sugar Trade within the Economy

Sugar trade is a crucial contributor to our GNP. At the time of independence in 1947, Asian country had solely 2 sugar mills one at Rahwali, Gujranwala within the geographical area and also the different in Takht Bhai in NWFP. Now, seventy six sugar mills ar operative out of seventy eightwith AN put in capability of around zero. 3 million TCD (tons of cane crushing per day). over ten million individualsand a meg farmers ar directly or indirectly engaged in cane and sugar production. The annual excise duty and nuisance tax paid by this sector amounts to regarding eight.5 3 billion rupees (PSMA, 2002). The sugar trade not solely plays major role in strengthening the country's economy however additionally brings a couple of major modification within the socioeconomic structure of the inhabitants of disadvantaged rural areas. these days this sector not solely is fulfilling the wants of the country however can also export some surplus production. Table four shows export and import information of various years of Asian country. Presently the government has allowed sugar export of zero.5 million tones, however sugar trade is seeking permission to export zero.9 million tones of sugar annually. Besides manufacturing sugar, the trade is additionallymanufacturing some by-products like pulp, syrup and filter mud that ar used as raw materials in different industries. Mill wise sugar cane crushing, raw utilization, sugar production, recovery proportion and syrup production of the Punjab for season 2001-2002 are given in table five. Another major role that sugar trade will play in boosting our economy is that in future it should become a crucial energy provider. Throughout the producing method it produces by product which may terribly economically be used for the generation of energy. This trade isn't solely independent in its current needs, however it may also generate loads of additional electricity. Lora, E.S. et al (2000) of DEM Federal polytechnic institute of Itajuba EFEI, Brazil conclude that "the introduction of advanced co-generation technologies within the sugar cane trade would enable the generation of considerable amounts of electricity with a lower environmental impact than the electricity generated from fossil fuels". So, with very little improvement within the technology, if venture between WAPDA and also the sugar trade is organized for the hard-hittingtechnology, a sugar mill with the capability of forty00 TCD will manufacture around 40 MW of electricity from sugarcane pulp. during this approach the country will be benefited with overall production of three,000 to 4,000 MW electricity and also the invested with quantity will be recovered by WAPDA among a 2 years time. This power generation throughout the crushing amount once the electricity power plants ar at their lowest ebb because of shortage of water within the dams will fulfill our needs with success.

Findings and Discussion (Challenges)


Over the past two to three years the sugar industry in Pakistan and specifically in Sindh is dealing with an extraordinary problems or you can say challenges. This disaster has affected the three factors of production, raw material suppliers, employees and owners similarly. Sugar industry problems and answer The growers complain of no longer getting fee which they demand, postpone in fee, employees are not getting the advantages which they used to get and shareholders fairness has eroded and transformed into poor. Liquidity hassle being faced through the mills is so acute that in maximum of the instances, the turbines are not able to clear their criminal liabilities.The banks are reluctant to improve to the sugar turbines in view of the overall state of affairs. Why all this passed off to an industry working satisfactorily until three years returned and what are the reasons? There isn't any doubt the growers will want to get a maximum go back from their product. however, it must be related with the price of a finished product. For the last 3 years, the turbines had been promoting sugar under the cost of manufacturing because of market scenario while the government is solving cane charges without linking with sugar rates. moreover, there is a distinction in a cane fee of Rs 3 in step with 40 kgs among Punjab and Sindh making sugar production in Sindh more high priced. The generators in Sindh also are required to pay high-quality premium @ 50 paisas in step with point one growth from the base healing of eight.70% whereas such charge is irrelevant in Punjab. The value of uncooked substances per ton of sugar in Sindh at 8.70% recuperation at Rs 43 consistent with forty kgs cane fee works out to Rs 12,356 whereas in Punjab it works out to Rs 11,765, making sugar in Sindh more expensive by Rs 591 in line with tons. The sugar marketplace in Punjab and Sindh generators must endure transport and transit costs however the former fetch lesser price of their product alongside the Punjab mills. this is a serious trouble and the authorities of Sindh have to see the good judgment rather than insisting on establishing its writ. Instantaneous answer of the problem is: the authorities of Sindh must repair a cane price on the premise of sugar fee however anyways now not higher than Punjab. The sugar industry at its very own ought to export 500,000 lots of sugar to fill the call for/deliver hole and to stabilise market.


  1. Low healing of sugar cane: a few, other locations of trouble is the sucrose recuperation, which in Punjab was eight. Fifty two% of the cane weight for 2001-2002. therefore, there can be a need for development inside the best of a cane besides in the milling sections of sugar enterprise. Within the Punjab, the cultivation of Indian Range COI-1148 office work round 70% of sugarcane, that's infested, diseased and genuinely degenerated. The recuperation of this range is two-three% lower than the alternative kinds which is causing countrywide loss. As for as a production procedure is involved, in maximum sugar cane generating countries, the turbines have computerized packages that advise speedy the records of planting, harvesting, truck arrivals in an afternoon, lifting of cane, crushing and so forth. This event guarantees the mill a higher healing, and the growers a better top rate. Sugar cane begins losing weight once it's miles reduce so it need to be overwhelmed soon after it's miles harvested. for that reason it's far usually perfect to discover sugar employer within the sugar cane producing areas (Knox, 1998). Weber's concept also examines the role of weight reduction ratio of raw fabric within the vicinity of employer and concludes that this kind of business enterprise must be positioned within the supply of uncooked cloth vicinity (Fellman et al, 1999). thankfully, the gas received from the burning of bagasse runs sugar turbines and no distinct gas is needed. consequently, the location of corporation isn't always effected with the resource of this problem. however within the take a look at location harvested cane remains lie in the fields for lots days earlier than it's miles lifted. the adventure and the wait outside the load Bridge generally take each other 12-24 hours. All this causes massive losses in sucrose content. about 20% of the recoverable sucrose is misplaced due to inefficient tactics. This loss is specifically borne with the useful resource of the mills. except a badly controlled shipping software program, an illogical manner in which the cane is harvested also reduces yields and quotes. No sugar mills receives the cane harvested in its command place scientifically so its harvesting have to be determined by the age of the crop and no longer with the aid of way of the acreage proven through the character growers (JDW Sugar mills, 2002).
  2. Increase in sugarcane expenses: The previous government unilaterally determined to increase sugarcane costs from Rs.24 to Rs.35 and Rs.36 in line with 40 Kg (approximately 33% will increase in raw material expenses). This sudden growth is one of the predominant reasons which has up-set the economic health of the sugar agency, and now yet again at some stage in modern year the fee of sugarcane has been substantially changed from Rs.35 to Rs.forty consistent with 40 kg and it's miles nonetheless no longer robust. It contributes to eighty% of the final price of the product whereas the fee of the sugar has not been changed. government has set weight as the precept criteria for the sugarcane charge encouraging the farmers to develop low pleasant cheap sugarcane, just like the Indian variety that consequences in low recuperation. for this reason, on an eight average cane restoration in Pakistan is 8% while in keeping with the global requirements it have to no longer be much less than 10.5% (Crescent Sugar turbines, 2002).
  3. Scarcity of irrigation water: even though, rainfall is useful for the crop however variability in its quantity can purpose damages. For the successful production of crop farmers cannot completely rely upon herbal rainfall. Sugar cane desires massive quantity of water and is usually produced under closely irrigated situations. therefore, it grows properly within the canal fed regions.
  4. Guidelines on exports: constant with an professional of the Pakistan Sugar mills affiliation (PSMA), after deducting the house consumption necessities, predicted at three million tones, the current season (2002-2003) is predicted to give up with a surplus of 0.five million tones. however there's a tussle among the sugar mills association and authorities on the problem of the amount of exports. as quickly as sufficient sugar has been produced for domestic intake, any surplus left with the turbines would possibly go to waste, entailing losses for mill owners. owners of sugar industry do not forget that they may with out troubles seize the neighboring markets particularly Dubai, India, Bahrain, Saudi Arabia and Iran and so on. Iran and India handiest, want over 0.nine million tones of imported sugar. at some stage in the current twelve months, sugar turbines country wide could produce about three. 5 million tones of sugar leaving behind a surplus of 0.five million tones. further, the molasses production might moreover touch a record level of 1.6 million tones.

Conclusion and Recommendations

Hard reality is that underneath the limiting economic factors poignant the sugar industry like space underneath cultivation, lower yield, low saccharose recovery combined by the arrear of cane growers payments, increasing trend of closure of sugar mills owing to multiple causes, lack of capital finance and specially amusing an enormous portion of cane production for Niger-Congo producing, it seems terribly tough to fulfill the domestic requirement. but with the right utilization of poor cane crop for the season 2000- 2001, the case for shortage of sugar is also reduced to 461,610 tons as computed under prospects and failure and can undoubtedly be met by commerce this sweetener commodity at the high international value of $ 248 per ton that wants a remote exchange of $ 114 million.The situation would be worse and obtain out of management if thirty seven.5% of cane production for the on-going season is pleased for seed and Niger-Congo producing rather than twenty fifth estimate and decline of saccharose content from average recovery of eight.62% to 8.33% as witnessed throughout the previous crisis season 1999-2000. in this case insufficiency of white sugar has been worked out to 972,843 tons that a hefty interchange of $ 241 million are required to import the sugar to feed a population of one hundred forty.94 million during the year 2000-01. Since de-zoning, the motivation of sugar mills to direct resources for development of fine variety cane in its space has nearly diminished as a result of the raiser World Health Organization have borrowed money from a sugar mill for development is absolve to take his sugarcane to any mill irrespective of that mill advanced the loan for development. it's conjointly one in all the causes of illness of sugar business. massive interest of the growers of the world and people.

The Government ought to seriously believe this crucial downside and create remedial measures along with those steered below to avert the crisis in the future.

  1. Balanced policy for the cultivation of 4 harvest ñ wheat, cotton, rice, and sugar. An incentive ought to be provided to the growers for cultivation of sugarcane on one. 150 million hectares.
  2. Indian seedseed, that has all degenerated and unhealthy have an effect on the production yield ought to be avoided. Instead, the government ought to import high- yielding sorts of sugarcane from alternative countries for averting any sugar crisis sometime.
  3. The government ought to create a content campaign for minimizing use of Niger-Congo so that most cane becomes accessible for crushing and creating white spoon sugar.
  4. The banking concern of Asian nations ought to earmark totaling concerning Rs. 2.7 billion and direct all business banks to finance assets demand of working sugar mills in each season through correct and argus-eyed disposition ways.
  5. Excise @ V-J Day is fastened on ex-factory value of Rs. Fourteen per weight units just in thefor supplies to registered people. A move to charge the excise on the value alternative than the fastened value of Rs.14/= can any produce downside for the customers who's getting power is already terribly low because of industrial sluggishness and stagnant economy. it's steered that excise mustn't be charged on the market price.
  6. The government ought to impose restrictions on excess production of Niger-Congo equivalent to twelve. 5% of the expected cane production of forty. 614 million tons from this year crop 2000=2001 to scale back the shortage of sugar within the country still as earn excise revenue of over one billion Rupees.


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