Produced from sugarcane sugar constitutes Pakistan’s second-largest agro-based industry after textiles ranking fifth in the world in cane acreage and ninth in sugar production. An important cash crop in our country. Sugarcane is an important source of income for the farming community employing over 1.5 million people.
This includes management, technology experts, skilled and unskilled workers. It also forms an essential item for industries (sugar mill) like sugar, chipboard, paper, barrages, confectionery, uses in chemicals, plastics, paints, synthetics, fibre, insecticides and detergents.
Increasing overtime. Despite expansion in sugarcane production over the years, the increase in the productivity per unit of area has been very low in Pakistan and continues to be below the productivity indicators of other countries. The average sugarcane production in the country is 45-50 tons/hectare, which is lower than the average yield of sugarcane in the world which is around 60 metric tons/hectare, while both India and Egypt are getting around 66 tons and 105 tons/ha respectively.
Hard to distinguish between politicians and sugar suppliers
While sugar cane is produced by small and medium-size farmers sugar is produced by large industrialists. Among the sugar producers, Jahangir Tareen-owned JDW sugar mills is the largest producer with a combined production of JDW-1, JDW-2 and JDW-3 of half a million tonnes (2018). Owned by Nauman Ahmad Khan, Baba Farid Sugar Mills of Almoiz Industries group is another major player.
It is interesting that some of the biggest Politicians in Pakistan. The primary sugar suppliers. These include the world’s largest multinational food manufacturers including PepsiCo, Coca-Cola, Mondelez, Unilever and Nestle. Almoiz owns five sugar mills supported by more than 40,000 farmers with sugar cane and beet crops across Pakistan and producing about half-a-million tonnes of white refined sugar each year.
HAMZA Sugar Mills owned by Tayyab group of industries (Hamza and Salman Shabaz) is third with an annual production of 309000 tonnes while fourth is Shakarganj sugar mills with a combined production of Shakarganj-1 and Shakarganj-2 of 173,000 tonnes. Besides, many smaller sugar mills owners are around like the Zardaris and others, directly and indirectly, most of them are active politicians or with considerable indirect political influence.
The extent to which the mafia is so powerful in Pakistan can be gauged from the fact that an officer of the Sugar Mill Corruption Investigation Commission provided information to the accused during the investigation. pic.twitter.com/MKuQSxsOJF
— Jalal khan khaqsar PTi (@JKhaqsar) April 23, 2020
Sugar is among the agricultural products exported by Pakistan. Given the climatic and other uncertainties defining an export quota has a certain hazard as short-term natural deviations from the expected yield can result in a lower or higher than forecast production.
Most of the time Pakistan produces enough sugar to meet the demand at home and if there is a bumper crop, the extra or surplus sugar is exported. The decision to export sugar is taken by the Economic Coordination Committee (ECC) of the cabinet, the top-level government body for such decision-making. The insecurity of sugar production is the reason why sugar export has been oscillating between zero and 1600MT over the years. 2005 was the last year with zero MT sugar export according to the indexmunid.com.
Between 2005 and 2013 a steady rise in sugar export was visible while between 2014 and 2017 a considerable fall in sugar export could be observed. Sugar export reached an all-time high with 1600 MT in 2018 that was among the reasons for the ensuing sugar crisis so that 2019 saw a fall in exports.
Pakistanis have a sweet tooth
Given the fact that Pakistanis have a ‘sweet tooth’ the consumption of sugar in Pakistan is rising year by year which is mainly due to rising population numbers and because that sugar is an important part of daily diet. The estimated per capita consumption of sugar in Pakistan is 25 kg which is highest in Asia comprising China with 11 kg, India with 20 kg and Bangladesh with 10kg per capita consumption.
The high consumption pattern of white sugar replacing traditional sugar ‘gur’ in Pakistan are the reason for several health hazards like obesity, diabetes and other metabolic disorders as well as hypertension and enhanced ageing. Recent scientific evidence is mounting that is biologically addictive. It’s as much as eight times more addictive than cocaine as research has found out.
2019 sugar crisis
Even though such high sugar consumption is detrimental to public health there is no policy to discourage it in Pakistan. With sugar remaining an important part of staple food makes its availability and consumer price in the Pakistan market a political issue. This has been visible by the formation of a real ‘sugar mafia’ consisting of the leading sugar tycoons sitting indifferent influential political positions including the “Task Force on Agriculture”.
During the investigation into the sugar crisis of 2019 when sugar became rare and its market price shot up that has been conducted on the initiative of the PM, the sugar mafia went as far as to threaten Prime Minister Imran Khan as well as DG FIA and Chairman of the Inquiry Commission Wajid Zia to immediately stop the probe into the sugar scam otherwise the country will see a severe shortage of the commodity and its price may hit Rs 110 a kilogram. The PM was not impressed, knowing Imran Khan we were not surprised!
Pakistan is definitely on the right path.
Sugar mafia exposed, Power sector exposed. Both the reports are public to nation. That's IK for you🔥.
— Usaid Hafeez🇵🇰 (@ThoraPrhLou) April 21, 2020
The report that has been submitted and published recently despite all threats established who are the winners of the ‘sugar war’. Unfortunately on the top of the list is PTI stalwart Jahangir Khan Tareen, a close aide of PM Imran Khan. Tareen’s sugar mills availed more than a fifth or Rs561 million of this subsiding close relative of Khusro Bakhtiar Makhdum Omer Sheryar’s Rahim Yar Khan Group availed Rs 452 million in a subsidy. The Federal Minister for National Food Security and Research (what a joke) who since then has been relieved of this position.
Other names that surfaced on the list has to include Moonis Elahi, a member of the National Assembly from Gujrat and the son of Punjab’s former chief Pervez Elahi belongs to the PMLQ, the coalition partner in the current set-up than there is Chaudhry Munir, a relative of Maryam Nawaz of the main opposition party, the PMLN, also among the beneficiaries as well as Pakistan Sugar Mills Association (Punjab) Chairman Nauman Ahmed Khan who is among the bigger beneficiaries of sugar exports in the country.
While the first consequences of the findings of the sugar crisis report have already been seen there is hopefully more to come by the end of April when the Forensic Report will be available. While one should not commit with authority, and Jahangir Tareen is a friend that I respect and admire he may have forgotten it but I was among those who encouraged him and his family Colleagues to join Imran Khan, there is a strong tendency to cartel formation in the sugar-producing industry viz (1)
Defunct regulatory institutions
Six groups control more than half of the local sugar production. These groups can manipulate the market by joining hands to become a cartel and manipulate. Where is the Competition Commission of Pakistan (CCP)? Were they sleeping or pretending to? The entire CCP management must be sacked for sheer dereliction of duty (2)
Mills are provided different data for sugar sold and sugar dispatched. Many of them have large go-downs and could hoard supplies. The law says that godowns that stock essential commodities should register with the government but no such data are available, this matter needs an audit. (3) Sugar barons must not sit in influential political positions related to agricultural decision-making. The damage inflicted by them has to be rectified and prevented in future.
Food production and procurement is a national security issue and needs to be controlled by the state through de-politicized institutions and bureaucracy. The current healthcare crisis has also shown that in a globalized world to prevent future crises the state and state intervention will have to play a larger role. Liberal market policies have been unable to secure the interest of the communities against the private profit interest of industrialists with the result that taxpayers have to pay the price for the profiteers. That is true for sugar in Pakistan and for other items including medicines worldwide
This is the first part of a series on Pakistan’s cash crops by Ikram Sehgal and Dr. Bettina Robotka.
Ikram Sehgal, author of “Escape from Oblivion”, is Pakistani defence analyst and security expert. He is a regular contributor of articles in newspapers that include: The News and the Urdu daily Jang.
Dr. Bettina Robotka is a former Professor of South Asian Studies, Humboldt University, Berlin.
The views expressed in this article are the author’s own and do not necessarily reflect Global Village Space’s editorial policy.