The government has convened an important meeting of the Sugar Advisory Board on Wednesday, to consider the Pakistan Sugar Mills Association’s (PSMA) request of allowing an urgent export of one million tonnes of sugar.
An informed source said that PSMA wants an export of one million tonnes of sugar during the March-April period. The association has already launched a media blitzkrieg to get permission. By April end, Brazil will enter the international market that will lead to a decline in prices of the commodity. The government had already allowed an export of 225,000 tonnes of sugar in December up till 31st March.
Pakistan’s sugar production has suddenly increased to more than 5 million tonnes per annum, from the previous 4 million tonnes per annum. The main reason is the fall in the commodity’s prices. Farmers of rice and cotton have shifted to the cash crop of sugarcane, as the growers have a government announced support price. The government offers no support to rice and cotton growers. The production of these two crops has massively declined during the last three years.
According to official estimates, the production of sugarcane has massively increased to 71.3 million tonnes this year, as compared to 65.4 million tonnes last year. The cotton crop is the main sufferer since its production has declined from 14 million bales to just 10 million bales during the last two years. Sugar Mills have already transferred Rs 226 billion to the growers this year.
The sugar production this year is likely to surpass 6 million tonnes. The country’s annual sugar requirements are assessed at 5 million tonnes per annum. If the government does not allow the sugar export, the glut in the market could have devastating impact on the farmers and the mills, the source added.
However, the government is also in a fix, as allowing more exports could lead to a hike in domestic sugar prices. With the upcoming general elections, the government would look in at all the pitfalls before allowing the exports. Any delay would be problematic, as the entry of Brazil would impact the current opportunities, an official source said, adding that permission for up to half a million tonnes of sugar exports could be given in a few days.
