Chairman Pakistan Sugar Mills Association Punjab Zone, Javed Kayani has said that State Bank of Pakistan should immediately withdraw the circular wherein it has enforced 50 percent cash margin against pledge of sugar in order to restrict and discourage hoarding of sugar. He said the sugar industry is already facing difficult times and it is hard to offload sugar produced for twelve months in a period of three months from the date of close of crushing season. According to circular the stocks are to be cleared by July 31 2009, which is impossible because the sugar is sold on day-to-day basis according to requirement of the market, he said. During this period the growers have been demanding cash payments for their sugarcane and non-payment can render the mills to face 'no cane' situation, which is very alarming, he said. The sugar industry is about to complete the crushing Season and it would be very difficult to make payments to growers. He said the State Bank of Pakistan and the government had a misperception of hoarding of stocks. He said the cost of production is driven by prevailing sugarcane prices, which are around Rs 150 per 40 kg. The major component in the production cost of sugar is the value of sugarcane, which is beyond the control of sugar mills. Kayani said this decision would result in increase in non-performing loans. He said the sugar industry should not be held responsible for non-availability of raw material at the Government's support price. He said the industry contributes substantial amounts as taxes to the national exchequer and provides employment to millions of people. Such circulars issued without taking the stakeholders into confidence would mean annihilation of the industry, he said. staff report