Industry group requests approval from the government to export one million tonnes of sugar

The sugar sector has begun to petition the government to get authorization for the export of one million tons of sweetness from Pakistan.

In a letter to Minister of Commerce Jam Kamal, the Pakistan Sugar Mills Association (PSMA) asked that the government expeditiously decide in the interest of the country to permit sugar exports in two installments of 0.5 MMT each on a quota system, as was done in January 2023. Afghanistan and Central Asian nations purchase costly sugar from India, but Pakistan has a competitive edge in securing viable import contracts from these nations because of its low freight costs.

When sugar was exported in the past, it was guaranteed that domestic sugar prices would not rise, but a few years later, local sugar prices increased. According to the PSMA, sugar is currently Pakistan’s second-largest agro-based business, behind the textile sector. It produces between Rs800 billion and Rs1,000 billion in direct and indirect commercial activity per year in the wholesale and retail markets, transportation, associated sectors, and agriculture. It pays the federal, provincial, and municipal governments a total of about Rs125 billion in direct and indirect taxes. In addition to giving our country’s economy $5 billion in import substitution, it directly employs 1.5 million people. At the conclusion of the crushing season 2023–2024, the PSMA reported that a surplus of sugar output had been reached. With a 1.5 MMT surplus, the total amount of sugar available this year is 7.5 MMT, compared to the 6.00 MMT annual consumption demand.

While the nation is fortunate to have consistently high sugar output each year, arrangements must be made immediately to dispose of excess sugar so that sugar mills can compensate sugarcane producers. In order to obtain the best prices and prevent being taken advantage of by foreign buyers, it is crucial to develop a policy for the export of at least 1.00 MMT of sugar in two tranches of 0.5 MMT each, free of any unnecessary restrictions like time constraints. According to the PSMA, Pakistan now has a window of opportunity for sugar export due to currency depreciation and an Indian prohibition on sugar exports because of increased ethanol production and local demand.

Sugar exports will generate $0.7 billion in foreign money, which is badly needed for our reserves. A strategic reserve of 0.5 MMT of sugar may also be established by the government. It stated that while 70% of sugar in Pakistan is used by the commercial sector, the federal government currently closely regulates and manages the export of refined sugar to guarantee that sugar is available to the general public at a reasonable price. We are still making the cheapest sugar for our own use, even though we paid up to Rs500/40 kg for sugarcane this year.

Without further investment, capacity expansion, or foreign exchange spending, Pakistan’s sugar industry can produce 12.00 MMT of sugar annually. It can yield 6.00 MMT of exportable excess sugar annually, generating $4.5 billion in revenue from sugar exports and an extra $1 billion from ethanol exports.