Islamabad – The Pakistan Sugar Mills Association (PSMA) has requested government approval for additional sugar exports, citing a surplus of over 1.08 million tons at the start of the new crushing season.
This appeal was presented on Thursday during a Sugar Advisory Board (SAB) meeting chaired by Federal Minister for Industries and Production, Rana Tanveer Hussain.
The government advised the industry to fulfill its current 790,000-ton export quota before considering further approvals. PSMA highlighted China’s annual 6 million-ton import demand, recommending government support for exports to China via government-to-government (G2G) or government-to-business (G2B) channels.
Key stakeholders, including PSMA, joined the SAB meeting to review sugar stock levels, the upcoming crushing season, market prices, sugarcane rates, global conditions, and production costs.
The minister directed PSMA to meet the 790,000-ton export quota within the three-month period starting October 8, 2024, while keeping local prices stable to avoid past consumer issues. Records indicate only 186,934 tons of the quota has been exported, leaving 603,066 tons unused.
PSMA representatives reported a sugar surplus exceeding 1.7 million tons this year, advocating for increased exports. Earlier, the government allowed PSMA to export 150,000 tons in June 2024, expanded by 100,000 tons in August, with an extra 40,000 tons to Tajikistan via government-to-government terms. On October 8, 2024, an additional 500,000 tons was approved for export.
PSMA representatives reported an overall sugar surplus of over 1.7 million tons this year, advocating for increased exports. Previously, the government permitted PSMA to export 150,000 tons in June 2024, later expanding this quota by 100,000 tons in August and allowing an additional 40,000 tons to be exported to Tajikistan on a government-to-government basis. On October 8, 2024, the government further authorized the industry to export 500,000 tons.
According to the cane commissioner’s sugar report, domestic consumption totaled 6.2 million tons over the past 11 months, with exports amounting to 186,934 tons, averaging a monthly use of 545,000 tons.
During 2023-24 crushing season, Pakistan has produced a total of 6.843 million tons of sugar, of which, 4.37 million tons was produced in Punjab, 2.022 million tons in Sindh and 447,000 tons in Khyber Pakhtunkhwa (KPK). Additionally, 823,000 tons of carryover stocks were reported, with 517,000 tons held by Punjab, 191,000 tons by Sindh, and 115,000 tons by KP, totaling 7.664 million tons.
The board set November 21, 2024, as the start date for the new crushing season, warning mills that failure to comply could result in serious penalties, including revocation of export permissions. Minister Hussain also mandated that PSMA members clear any outstanding farmer payments before the new season begins.
In June, PSMA proposed exporting one million tons in the first phase, expecting $650-700 million in foreign exchange, with an extra 0.6 million tons to follow in two phases. Officials noted last year’s sugarcane price was Rs350 per 40 kg, rising to Rs450 in 2023-24. They estimated current production costs at Rs170 per kg, while retail prices stand around Rs140 per kg, among the lowest globally.
The meeting also reported a recent drop in wholesale sugar prices, now at Rs6,400 per 50-kg bag, the lowest in two years. PSMA officials highlighted that domestic production costs are approximately $503 per ton, whereas international prices as of November 6, 2024, stand at $562 per ton. They argued that export permission would benefit both the industry and Pakistan’s economy.
The meeting further disclosed that 85% of sugar produced is used industrially, with the remaining 15% for domestic consumption. Sugar is subject to an 18% general sales tax (GST).
