LSM Output down as sugar production drops amid farmers’ protests

According to latest data released by the Pakistan bureau of Statistics, Large Scale Manufacturing in the period between July – November saw a decline in the output by more than 2%. The decline which came during the month of November, 2017 had a lot to do with more than 80% decline in production of Industrial crops especially sugar. Industrial Crop is a cultivated plant that is used as raw material by any one of various branches of industry. They are divided into several groups according to the product obtained. Sugar-bearing plants contain sugar in their stems sugarcane, sugar maple, roots, sugar beet, or flowers gomuti and wine palms.

As per the country’s crop calendar, Sugarcane (autumn), Sugarcane (spring), and Sugar Beet are harvested during the period of September to December. The period is crucial for production of sugar, as the sugar crop is sold by farmers to the mill owners for further processing. Sugarcane is grown on approximately 1.25 million hectares and provides the raw material for 84 sugar mills. The sugar industry is the Pakistan’s second largest agriculture-based industry after textiles. Pakistan’s sugarcane production during year October – September 2017/18 is forecasted at a record of 72 million metric tons (MMT).

According to the Ministry of Industries numbers, Sugar Production during the month of November posted a decline of up to 80.98% due to ongoing tensions between Farmers and Mill owners. The Farmers have been reluctant to sell their crops on the ask price by mill owners. The reported clashes between farmers and Sindh Government during the last few months have been as a result of this friction amongst these groups.

Cotton Yarn and Cloth production was relatively unmoved and remained the same throughout the period. Cigarette Production posted a significant jump of more than 58% during the period as September harvest resulted in a major uptick in the total production.

Petroleum production was also relatively negative during the month of November, most of the oil heads reported decline in total production. With Lubricating Oil, Kerosene Oil and Solvent Naptha declining by more than 40%, 26%, and 19% respectively.

Cumulatively, all of the respective indices including OCAC, Ministry of Industries and BOS Index posted a decline of 4.69%, 1.3% and 3.21% respectively.