By Commerce Reporter
LAHORE — Pakistan’s sugar industry has incurred losses of Rs98 billion over the past year amid declining sugar prices and delays in government policy decisions, the Pakistan Sugar Mills Association-North Zone (PSMA-NZ) said on Sunday.
Citing weekly data from the Pakistan Bureau of Statistics, the association said sugar prices had fallen by up to 25% over the past year, leaving mills struggling with surplus stocks, financing costs and mounting financial pressure.
In a statement, a PSMA-NZ spokesman said the association had repeatedly highlighted a surplus of 1.3 million metric tons (MMT) of sugar following the closure of the 2025-26 crushing season. However, the government had not responded to repeated requests for timely export permission, the spokesman said.
The association said at least 12 sugar mills across the country had already shut down because of losses, while several others were facing the risk of closure.
It warned that the financial difficulties could affect the timely start of the 2026-27 crushing season and limit mills’ ability to offer competitive prices to sugarcane farmers.
The association said the surplus had depressed domestic prices, preventing mills from recovering production costs and earning reasonable profit margins. Mills were also bearing additional financing costs on bank loans used to hold unsold stocks, it added.
According to the association, sugar prices in Pakistan were among the lowest in the world despite the country’s high sales tax rates.
The industry warned that the situation could deteriorate further when fresh sugar supplies enter the market during the upcoming crushing season, expected to begin in about a month.
Pakistan is projected to produce approximately 8.5 MMT of sugar during the 2026-27 season, according to the association.
The PSMA-NZ urged the federal government to allow the export of an additional 800,000 metric tons of sugar, on top of the 200,000 metric tons already permitted, to reduce surplus stocks and ease financial pressure on mills.
It also called for the complete deregulation of the sugar sector, arguing that market-based pricing and trade policies would help the industry operate more efficiently.
The association warned that continued financial pressure could hurt sugarcane farmers and the broader agricultural economy. It also cautioned that Pakistan could eventually have to import sugar for domestic consumption, spending scarce foreign exchange instead of earning revenue through exports.
