Sugar Industry

SUGAR INDUSTRY PRESENTATION BY: HARIS SALEEM NASREEN KHAN

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• Sugar is a vital ingredient in most of out daily consumption articles. For example: Soft drinks, juices, tea, biscuits, sweetmeats, bakery items, deserts, pharmaceutical industry, etc. • It is a vital need more than a want to our society.

Introduction • The Sugar industry in Pakistan is the Second largest agro based industry after Textiles. • Pakistan is an important cane producing country and is ranked fifth in world cane acreage and 15th in sugar production. • Its share in value added of agriculture and GDP are 3.4 percent and 0.7 percent, respectively.

History • During the year 1997-1998 there were 75 sugar mills in the country and it produces 2.4 million metric tons sugar. • Sugarcane is grown on over a million hectares and provides the raw material for Pakistan’s 77 sugar mills. • Dewan Sugar Mills Limited established as a public limited company in 1982 is one of the largest sugar mills of Pakistan having a cane crushing capacity of over 9,000 tons per day. • Apart from the four mills located in the North West Frontier Province which are based on sugar beet, all others use sugar cane as the raw material.

Sugar Mills of Pakistan

Manufacturing Process: • Sampling. • Cleaning. • Slicing. • Diffusion. • Purification. • Evaporation. • Crystallization. **A number of chemicals including lime, sulphur, phosphoric acid, bleaching powder, polyelectrolyte, floatation aid and decolourant are used in sugar making process.

Present & Future Consumption • Total per capita refined sugar consumption is estimated at 25 kilograms, based on improved domestic supply and strong demand. • MY 2009/10 sugar consumption is forecast at 4.35 MMT. Total per capita refined sugar consumption is estimated at 25 kilograms, based on improved domestic supply and strong demand. • According to a rough estimate by year 2020 the country will need about 5.5 million tons of sugar to meet the national demands and require 1.5 million hectares of area under sugar cane crop compared to now of 1 million hectare.

Present & Future Production • MY 2008/09, sugarcane production is estimated at 51.5 MMT, a decrease of 19 percent over the previous year due to both a reduction in area harvested and yield. • MY 2009/10 sugar cane production is forecast at 53.6 MMT, an increase of 4 percent over the previous year due to an expected increase in area and yield. • The Agriculture Ministry and the Pakistan Sugar Mills Association have initiated a sugar crop development project. Punjab and Sindh Provinces have already conducted research in the cultivation of sugar beet. Results have been encouraging. Industrial adoption and commercialization of sugar beet requires additional research as well as comprehensive planning on the part of government, industry and the farm community to make cultivation of this potential crop a success.

Production Policy • The Government of Pakistan (GOP) is striving to achieve selfsufficiency and sustainability in sugar. The sugar industry is looking for added value and by-products, as well as reducing costs and promoting cultivation of high sucrose cane. • The Government supports cane production by setting an indicative price, which is announced either before or after planting. The Federal government authorizes Provincial governments to fix respective cane prices in consultation with representatives of both the sugar industry and farmer organizations. • The Ministry of Food, Agriculture and Livestock (MINFAL) is in consultation with the Pakistan Sugar Mills Association (PSMA) in an effort to increase sugarcane productivity and to increase the capacity of sugar mills which are currently operating at 50 percent.

Sugarcane Area & production By Province (In MT ‘000’)

Indicative Prices of Sugarcane by Province

By-Products of Sugar Cane

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Bagasse: - It is produced in the mill house in a quantity of about 30% of the crushed cane. - The bagasse contains 50% moisture - It is used as a fuel for boilers (processing stage). - Bagasse is also used for chip-board and paper manufacture.

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Molasses: - Molasses is a common ingredient in baking, often used in baked goods such as ginger bread cookies. - 80% of total available molasses is exported.

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Press Mud: - Press mud is a very valuable source of fertilizing organic matter. - This product is very useful for higher yield per hectare and improvement of sugar content.

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Ethanol: ⁻ Ethanol fuel for vehicles is made from sugar cane. ⁻ The renewable fuel could then be used for automotive and jet engines with no performance trade-offs. ⁻ Energy fuel derived form sugar cane offers the advantage of significantly reduced emissions.

Year Wise Molasses Production and Ethanol Export:

Trade

(Figures in Thousand Metric Tons)

SWOT-Analysis • STRENGTH: - Most of population live in rural areas that’s why labor is cheap. - Cultivatable land is available for the production. - Large domestic market is available.

• WEAKNESS: ⁻ We do not have proper recycling system which results in high water consumption. ⁻ We do not tune-up boilers periodically that causes emission of gases. ⁻ Low yield. ⁻ Farmers are using old technology for production. ⁻ Sucrose recovery rate is less than international standard.

• OPPOURTUNITIES: - We can increase per yield production by using new technologies and fertilizers. - We can shift towards beet production as it is more cheaper. - We can earn foreign exchange by exporting surplus sugar. - Rather than exporting raw material we can add value to it.

• Threats - The production of sugar cane decreases the productivity of land. - As sugar cane crop requires a lot of water, increase in production may create shortage of water for other crops.

Sugar Crisis • The country is facing the worst sugar crisis in its history with the price of sugar touching Rs. 54 per kg in the retail market and Rs. 52 per kg in the wholesale. • Sugar prices have risen because of the demand-supply situation. The supply in the market is not enough to meet the current demand. • Production of sugar cane is declining because the land used for farming is now being used for other purposes. Besides, sugar cane is now grown on lesser and lesser area with each passing year in Sindh due to scarcity of irrigation water. • Sugar shortage will be on the rise every year because of the reduced area of sugarcane crop and steady growth in population.

• The main reason for the current rise in sugar prices are created by the hoarders, wholesalers and the mill owners. • The increase in sugar price had adversely affected the biscuit industry, as 155 out of the 250 units in the country had been forced to shut down. • Sweets which were earlier being sold at Rs150 to Rs180 per kg are now being sold at Rs260 to Rs300 per Kg. • To meet the current demand, government have to import sugar from abroad, which would have a negative influence on the country's trade balance.

Recommendations • The Government should facilitate improved varieties of sugar cane having higher sucrose recovery through Agriculture Research Institutes and more effective measures required for disease control and better pesticides used. • Availability of adequate supply of water, appropriate use of fertilizer and proper spraying of insecticides & pesticides can improve yield per hectare. • Gur production should be banned during the sugarcane crushing season so that maximum sugarcane is made available to sugar manufacturers. • Improvement in procurement and storage to reduce wastages. • Development of Industries for proper utilization of byproducts which can earn enhance revenues. • Use sugar beet as a supplement to sugar cane for sugar production.

Conclusion • Sugar industry has a potential to achieve heights in Pakistan if major steps are taken into consideration in this regard. • Sugar industry being the second largest agro based industry faces a lot of problems and if steps for its betterment are not taken this industry can collapse which will result in importing sugar from foreign countries and would eventually result in an increase in the trade deficit. • Other than sugar we can diversify and produce Ethanol which has been proved to be very helpful in developing economies and ease our import bill.

Source: • • • • • • • • • • • • •

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