MUMBAI  – The government is likely to give permission to cash-strapped mills in October to export at least 300,000 tonnes of sugar in order to support their earnings ahead of the start of the new crushing season, a leading trader told Reuters on Thursday.

Sugar prices in Pakistan are depressed by higher output, with the country set to produce a surplus for a second straight year in a row in the year starting Oct. 1, 2012, said Najib Balagawala, chief executive of Pakistan-based SeaTrade group.

“This is the right time to export. There is continuous demand. We are expecting in October the government will allow exports, at least 300,000 tonnes,” Balagawala told Reuters by phone from Karachi.

The country is likely to start the new marketing year carrying forward stocks of 250,000 to 300,000 tonnes, he said.

Pakistan’s sugar output in 2012/13 is likely to rise to 4.6 million tonnes, against local demand of about 4 million tonnes, giving the country enough surplus for exports, Balagawala forecast.

The Pakistan Sugar Mills Association earlier this month asked the government to allow exports of 500,000 tonnes.

“Exports will give some room for the sugar mills to pay farmers next year ...otherwise you would see farmers having a lot of problems getting rid of sugar cane,” Balagawala said.

In the current marketing year the country has so far allowed exports of 300,000 tonnes in two tranches, the latest of which was announced in May.

The country has sold most of the quantity allowed for exports, mostly to Afghanistan, Saudi Arabia and east African countries.

Exporters are currently offering sugar at around $560 on a FOB basis, but they do not have permits to export.

“If permits were available, then you would have seen Pakistan exporting a further 200,000 tonnes by now,” Balagawala said. December white sugar on Liffe was up 0.95 percent to $575.7 per tonne at 1138 GMT.