Business
Govt delays decision on surplus sugar export
A PSMA spokesman appeals to government that US$850 million can be generated by exporting surplus sugar stocks ascertained through different credible sources
Lahore: Pakistan Sugar Mills Association (Punjab Zone) said on Monday that despite confirmation of surplus stocks in multiple meetings, the government is delaying policy decision on pleas of Sugar Industry of earning valuable foreign exchange for the country by exporting surplus sugar.
A PSMA spokesman has appealed to government that US$850 million can be generated by exporting surplus sugar stocks ascertained through different credible sources in many Sugar Advisory Board meetings as 1.5 million tons in excess of our domestic need.
Huge financial resource of sugar mills is stuck in surplus stocks worth Rs210 billion
Current international price of sugar has gone down to US$510 per ton from 5750 per ton since the time PSMA started requesting government to allow sugar exports, hence missing an opportunity to earn much-needed foreign exchange for the national exchequer by delaying export permission.
Prices of sugar are already much lower than its higher cost of production due to constant increases in major cost components like prices of sugarcane, interest rates, taxes, wages and imported chemicals.
Since closure of last crushing season, sugar mills are bearing additional carrying costs of surplus stocks which include banks mark-up at the rate of Rs2.25 per kg per month besides incurring other maintenance costs. No local buyers are available due to glut-like situation and the industry is held up with surplus stocks.
Due to minimal exports out of huge surplus stocks and extraneous expense on carryover stocks, smooth functioning of the mills in the forthcoming crushing season starting in November 2024 would be highly unsustainable. Next sugarcane crop is again going to be a bumper crop and sugar mills will resultantly produce another surplus of 1.5 to 2.0 million metric tons as two months are left for the next crushing season and the industry have no space to stock sugar produced in the next season.
The sugar industry again requests the government to urgently allow export of whole surplus sugar stocks in national interest, to enable the industry to survive and remain viable enough to produce sugar for the country and to meet the expectations of sugarcane growers.