SUGAR INDUSTRY IN PAKISTAN

By MUHAMMAD ASLAM MEMON 

Sep 23 - 29, 2002

This research article analyses the position of sugar industry in Sindh province during the period 1990/91 -
1999/2000. The output of sugar as well as the production of sugarcane increased at an average rate 24
percent and 11.7 percent. But the increased out put could not meet the requirements.

The sugar industry plays an important role in the economy of the country. It is the second largest industry
after textiles. At the time of independence in 1947, there were only two sugar factories in Pakistan. The
output of these factories was not sufficient for meeting the domestic requirements. The country started to
import sugar from other countries and huge foreign exchange was spent on this item. Need was felt to
increase the production of sugar. Keeping in view the importance of sugar industry, the Government
setup a commission in 1957 to frame a scheme for the development of sugar industry. In this way the first
sugar mill was established at Tando Muhammad Khan in Sindh province in the year 1961. At present
there are 76 sugar mills operating in Pakistan.

The Sugar industry employs over 75000 people, including management experts, technologists, engineers,
financial experts, skilled, semiskilled and unskilled workers. It contributes around 4 billion rupees only
under the head of excise duty and other levies to the Government are also paramount significance.

This research article firstly describes introduction, secondly cultivated area, production and per hectare
yield of sugar cane, thirdly examines per hectare yield with other countries, fourthly crushing capacity of
sugar mills, output and recovery percent of sugar, fifthly projection of sugar demand with the increasing of
population and lastly conclusion.

ACREAGE, PRODUCTION AND YIELD OF CANE

Pakistan is the 4th largest among the sugarcane producing countries in the world.

Table: 1 
CULTIVATED AREA, TOTAL PRODUCTION AND YIELD PER
HECTARE OF SUGARCANE. FROM 1990/91- 1999/2000
Year Area under Total Production Yield Per Hectare
cultivation of
sugarcane
  000 % 000 % Kgs % Increase
Hectare Increase Tones Increase or Decrease
or or
Decrease Decrease
1990-91 884 100 35989 100 40,720 100
1991-92 896 101.36 38865 108 43,371 106.51
1992-93 885 100.11 38059 105.75 43,024 105.66
1993-94 963 108.94 44427 123.45 46,144 113.32
1994-95 1009 114.14 47168 131.06 46,747 114.80
1995-96 963 108.94 45230 125.68 46,968 115.34
1996-97 965 109.16 41998 116.70 43,521 106.88
1997-98 1056 119.46 53104 147.56 50,288 124.56
 1998-99 1155 130.66 55191 153.35 47,874 117.35
1999-2000 1010 114.25 46363 128.82 95,904 112.73
Source: Government of Pakistan, Economic Survey.

Table No. 1. focuses on cultivated area, output and per hectare yield in Pakistan during the period 1990-
91 to 1999-2000. The total cultivated area increased with the average increasing 10.7 percent.

(i) From 884 (000) hectares to 1010 (000) hectares.

(ii) The total production of cane rose from 35,989 (000) tones to 46,363 (000) tones with the average
increasing rate of 24 percent.

(iii) The per hectare yield went up from 43,720 Kgs to 45,720 Kgs at the average rate 11.7 percent during
the study period. This indicates good progress as an increasing output as well as per hectare yield of
sugarcane.

COMPARISON OF PER HECTARE YIELD OF SUGAR CANE WITH OTHER COUNTRIES.

It is pointed out from the Table 1 that the overall out put of sugarcane has been increasing continuously.
But yield per hectare is low as compared with other countries as shown in the Table No. 2

Table 2
COMPARISON OF PER HECTARE YIELD OF SUGAR
CANE WITH OTHER COUNTRIES.
Name of Yield Per Hectare in Kgs
Countries 1990-91 1996-97 1997-98 1998-99
Brazil 61744 67518 69097 68436
India 64140 68169 66487 66919
Cuba 57037 33186 35833 31818
Pakistan 40712 43544 50279 47780
USA 76800 74297 77729 80237
ECUADOR 57000 63208 55556 68571
Egypt 94737 110741 108933 110800
Mauritius 72826 72057 79575 79452
Source: (i) Government of Pakistan, Agriculture Statistics
of Pakistan 1990-91, Islamabad, 1991, P. 106 (ii) Ibid
Agricultural Statistics of Pakistan, 1998-99 P.104

Egypt produces the highest yield of cane as compared with other countries. The reasons for low yield in
Pakistan are as under:

(i) Unscientific/Unsystematic agriculture practice. (a) Improper selection of land. (b)Improper preparation

of land. (c) Conventional planting methods. (d) Late Planting (e)Moisture Stress at critical stage of crop
growth. (f) Early and late harvesting. (g) Poor Management of ratoon crop. (ii) Environmental
Resistance (iii) Low soil fertility (iv)Defective verities (v) Pests, disease and weeds(vi) Credit
shortage (vii) Rapid/ Unplanned increase in Sugar cane acreage in unsuitable areas of Pakistan.

CRUSHING CAPACITY OF MILLS

 In Pakistan, 76 Sugar mills are operating having a crushing capacity of 361,300 tons of cane per day.

Table: 3 
 CANE PRODUCTION, CRUSHING, MILLS, UTILIZATION, CANE
PERCENTAGE, SUGAR OUTPUT AND RECOVERY PERCENT
1990/91-1999-2000
Year Cane Cane No Utilization Sugar Recovery
Production Crushing of %  Production o/o
000 Tons in Tons Mills By Mills Tones
1990-91 35989 22603696 51 62.80 1908838 8.44
1991 38865 24795815 53 63.80 2296698 9.26
-92
1992-93 38059 27274806 61 71.66 2375289 8.71
1993-94 44427 34181899 63 76.93 2900523 8.49
1994-95 47168 34193290 66 72.49 2983101 8.72
1995-96 45230 28151434 66 62.24 2449598 8.70
1996-97 41998 27152918 68 64.65 2378751 8.76
1997-98 53104 41062268 71 77.32 3548953 8.64
1998-99 55191 42994911 71 77.90 3530931 8.21
1999- 46363 28982711 67 62.51 2414746 8.33
2000
Source: (i) Government of Pakistan, Economic Survey 1999-2000,
Islamabad, 2000, P.24 (ii) Pakistan Sugar Mills Association (PSMA),
Quoted in the Daily Dawn, Dated 5/2/2001.

Table 3 indicates the whole picture of sugar industry in the country. In 1990-91, 51 sugar mills were
operating and they utilized 62.80 percent of total cane production. The output of sugar was 1908838
tones and the recovery became 8.44 percent. The operation of mills increased to 71 in the year 1998- 99
and decreased to 67 in the year 1999-2000. It shows that four mills were closed due to financial crises.
This affected the crushing capacity as well as output of sugar during the year 1999-2000 as indicated in
Table No. 3. Such declining output created sugar problem in the country. Requirements can be met by
importing sugar from other countries or by enhancing the domestic out put of sugar.

PROJECTION OF DEMAND AND SUGAR PRODUCTION CAPACITY

Pakistan's present population is 13.5 million. With an average growth rate of 2.5 percent per year the
population of country will grow from year to year as shown in Table 4. The per capita of sugar in Pakistan
is about 22 Kgs. The estimated domestic consumption is provided in Table No. 4.

Table 4: 
PROJECTION OF DEMAND AND SUGAR PRODUCTION
CAPACITY 1998/99-2004/5
Year Population Domestic Projected Sugar
In Million Consumption Prod: Capacity In
in Tones Tones
1998-99 134.51 2959000 3530850
1999- 137.51 3025220 2414746
2000
2000-01 140.94 3100680 3304360
 2001-02 144.47 3178340 3304360
2002-03 148.08 3257760 3304360
2003-04 151.78 3339160 3304360
2004-05 155.58 4322760 3304360
Source: Government of Pakistan, Economic Survey, 1999-
2000, Islamabad, 2000, Statistical Section P.07

(i) Keeping in view the balance of production of agricultural sector and peculiar problems of the sugar
industry faces due to its being a sort of political industry as well as its seasonal nature the minimum
production of 3.3 million tones per season will be sufficient enough to meet not only the domestic demand
but also make surplus sugar available during the next three years as mentioned in Table 4.

(ii) It is very important point that by utilizing 38.3 million tones of cane against their normal plant capacity
of 58 million tones of sugar cane, the mills would still have an unutilized capacity of 34 percent. The
Government should, therefore, focus its policy for increasing the production of sugarcane on the existing
area under cultivation and sugar output by the existing mill. It should not encourage further increase in the
number of Sugar mills.

(iii) This clearly indicates that the existing mills are sufficient enough to produce the
country's requirement of sugar for the next three years.
MAIN MEASURES FOR IMPROVING SUGAR INDUSTRY

HIGH YIELDING VARIETIES OF SUGAR CANE

High yielding varieties of cane should be introduced in the agricultural sector. This will bring improvement
in cane yield per hectare and will increase in sucrose content. Such varieties will rise the output of Sugar.

INITIAL WORKING CAPITAL

Nine units are likely to be closed viz. Bachani, Thatta, Dadu, Kiran, Lakana, Tharparkar, Thar, Pasrur and
Qaud Ghar. The cause of closure of these mills may be lacking of initial capital, which is imperative for
transaction. These mills should be financed by the banks for continuing the operations. This step can
increase the output of sugar.

DIVERSIFICATION OF EXCESS QUANTITY OF RAW CANE

The Raw cane 37.5 Percent instead of 25 Percent is being diversified into seed, and Gur manufacturing.
If 25 percent cane is diversified, it can save 12 percent of raw cane and will produce 113,587 tons of
sugar resulting in saving of million foreign exchange.

CONCLUSION

At the time of independence in 1947, Pakistan got two sugar mills as its share. The output of these mills
was not sufficient for meeting the domestic requirements. Huge amount of foreign exchange was being
spent on the import of sugar. The cane commission was setup in 1957 to form plan for increasing the
output of cane and establishing sugar mill in the country.

This research article analyses the position of sugar industry during the period 1990/91-1999/2000. During
this period the cultivated area under cane increased at average rate of 10.7 percent, output of cane
production rose at average rate of 24 percent and the yield per hectare went up at the average rate 11.7
percent. But the per hectare yield was lower in the country as compared to other cane growing countries.

Looking at Table 3, it was pointed out that the existing number of operating mills reached to 71 in the year
1998-99 but again declined to 67 due to closure of certain units. The crushing capacity of cane and
production of sugar increased up to 1998-99 and again decreased which created shortage of sugar. This
can be increased by introducing new varieties of cane as well as starting the closure units.

*The author is Assistant Professor, Department of Commerce, Shah Abdul Latif University,
Khairpur