By Our Correspondent
ISLAMABAD – The Pakistan Sugar Mills Association (PSMA) has urged the federal government to immediately allow the export of surplus sugar, warning that large unsold stocks could create financial difficulties for mills and affect sugarcane cultivation in the coming season.
In letters addressed to Deputy Prime Minister Senator Ishaq Dar and Federal Minister for National Food Security and Research Rana Tanveer Hussain, the association said around 3.4 million metric tonnes of sugar were available in the country as of July 15, based on figures reconciled between the Federal Board of Revenue and the sugar industry.
The association said average domestic consumption stood at approximately 567,426 tonnes per month. On the basis of existing stocks and expected consumption, it projected that the country could still have around 1.158 million tonnes of surplus sugar when the new crushing season begins on November 15.
The industry has therefore requested permission to export 585,000 tonnes of the surplus immediately.
Industry warns of pressure on sugarcane farmers
The association said the situation was becoming particularly important as farmers prepare for the upcoming sugarcane sowing season.
According to the industry, substantial quantities of sugar remain stored at mills, limiting their ability to generate funds and purchase the next crop from growers.
The association argued that timely payments to sugarcane farmers during the past two years had encouraged growers to adopt improved varieties, resulting in better yields and higher sugar recovery.
It warned that continued accumulation of unsold sugar could weaken incentives for farmers to maintain or expand sugarcane cultivation.
The industry also expects another strong sugarcane crop during the 2026-27 season, with sugar production potentially reaching around 8 million tonnes.
Such production, the association maintained, could again exceed domestic requirements and add to existing stocks unless an export mechanism is put in place.
Mills face financial pressure
The sugar industry said mills were currently carrying significant inventories at a time when domestic demand remained weak.
It further claimed that prevailing sugar prices were below production costs, while expenses associated with sugarcane, energy and other inputs continued to increase.
The accumulation of stocks has also affected the liquidity position of mills, according to the association, making it increasingly difficult for them to meet financial obligations, including repayment of bank loans.
The PSMA argued that allowing exports could provide mills with working capital and create room for them to purchase sugarcane from farmers ahead of the new crushing cycle.
Request for further export permission
The association has also asked the government to consider permitting exports from strategic reserves within one month after the start of the new crushing season.
The industry believes that a phased export policy could help prevent excessive accumulation of stocks while maintaining adequate supplies for domestic consumers.
It warned that if surplus stocks remain trapped in warehouses, the consequences could extend beyond the current season. Lower purchasing capacity at mills could affect growers, while reduced incentives for sugarcane cultivation could eventually result in lower domestic production.
In such a scenario, Pakistan could become dependent on imported sugar, requiring foreign exchange to meet domestic demand.
The association has therefore urged the government to take an early decision on the export proposal, arguing that clearing existing stocks before the new crop reaches mills would help maintain the financial sustainability of the industry and support sugarcane farmers.
