ISLAMABAD - The Pakistan Sugar Mills Association (PSMA) on Monday said that the federal government is delaying policy decision on the pleas of the sugar industry to earn valuable foreign exchange for the country by exporting surplus sugar.
A PSMA (Punjab Zone) spokesperson has appealed to the government that $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 tonnes 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 $510 per tonne from $750 per tonne since the time PSMA started requesting the 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 bank 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 situations 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 tonnes as two months are left for the next crushing season and the industry has 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.