By Commerce Reporter
LAHORE: Pakistan Sugar Mills Association has stated that despite confirming surplus sugar stocks in multiple meetings, the government is delaying a decision on the sugar industry’s requests to export the surplus sugar and earn valuable foreign exchange for the country.
The spokesperson stated that presence of surplus sugar in the godowns is forcing the sugar mills to bear additional costs—including bank mark-ups—for holding surplus stocks.
Only two months are left until the start of sugarcane harvest and the new crushing season, yet the sugar industry is facing an acute shortage of cash required for maintenance and repair of plant and machinery, payments to farmers, salary disbursements, and other related matters. This situation is extremely concerning.
Estimates for the new crop project a sugar production of 8 million metric tons; however, storing the new season’s sugar will prove difficult given the existing surplus of one million metric tons.
Sugar mills have seen a manifold increase in production costs due to the continuous rise in sugarcane prices, taxes, wages, and the cost of imported chemicals, whereas sugar prices remain far below the cost of production.
The PSMA has long been highlighting these issues in the media, yet the federal government has not responded positively to the sugar industry’s demands. The situation has now reached a critical juncture; mill warehouses are overflowing with surplus sugar, and there are no buyers in the market. Given that the international market is currently favorable, the government should immediately capitalize on this situation, as exports could generate between US$700 and US$800 million in revenue.
The sugar industry once again strongly urges the government to immediately permit the export of an additional one million metric tons of sugar in the national interest, so that the industry and farmers can overcome the current crisis.
