KARACHI: The Pakistan Sugar Mills Association (PSMA) has formally requested the Commerce Ministry for the authorization to export sugar, citing a significant surplus in production.
This move is aimed at addressing the domestic market’s price surge, according to officials within the Commerce Ministry.
The request follows a period where sugar mills engaged in competitive bidding for sugarcane, resulting in purchase prices reaching as high as Rs600 per 40kg, surpassing the support prices of Rs400 and Rs425 per 40kg in Punjab and Sindh, respectively.
Despite an adequate crop yield, this aggressive procurement led to a spike in production costs. Consequently, PSMA is exploring export as a strategy to mitigate the financial impact and potentially influence local sugar prices.
In its communication with the commerce minister, PSMA highlighted the sugar sector as a pivotal agro-based industry in Pakistan, second only to textiles.
It underlines the industry’s annual contribution of Rs800 to Rs1,000 billion to the economy through various sectors, including agriculture, transportation, and retail.
Furthermore, the sector is a significant tax contributor, adding approximately Rs125 billion to government revenues and providing employment to 1.5 million individuals.
The association also pointed out that Pakistan’s sugar production exceeded its annual consumption demand, with a total of 7.5 million metric tons (MMT) produced against a need of 6 MMT, leaving a surplus of 1.5 MMT at the end of the 2023-24 crushing season.
PSMA advocates for the government to permit the export of at least 1 MMT of sugar in two phases to optimize market conditions and prevent exploitation by international buyers.
