The sugar industry will face difficulties in making payments to cane growers, besides repaying bank loans, if millers are not allowed to export their surplus stock, industry sources told Business Recorder on Wednesday. Sources said that sugar millers owe approximately Rs 40 billion to banks. Millers are said to have a surplus stock of about 500,000 tons of white refined sugar as crushing season comes to a close.
Although the government has allowed the export of 100,000 tons of sugar, millers are calling for exporting 400,000 tons more. They feared that export restrictions would make it difficult for them to pay some Rs 250 billion, which they would have to pay to growers against cane purchase.
Sources in the Pakistan Sugar Mills Association (PSMA) said the country still had a surplus stock of 800,000 tons of the commodity even after exporting 100,000 tons. They said the TCP could maintain a buffer stock of about 300,000 tons after exporting 522,000 tons of sugar even after meeting the country's entire requirement for the next year. The TCP is expected to buy 400,000 tons of sugar this year. The export of surplus commodity should be allowed to save the industry as well as the farmers, said Deaomal Essarani, the president, PSMA, Sindh Zone.
He said that this would not only enable them to offload surplus sugar but also help earn precious foreign exchange, adding that the prices in the international market were well above the prices in domestic market. Detailing sugar production figures for 2012, Deomal said that sugar production during the current season was 4.8 million tons.
"We have to repay bank loans besides making payments to growers. The government should allow us to export at least 200,000 tons against which it will earn a precious foreign exchange of about $150 million," he said, adding that if the industry was allowed to export whole surplus stock of 522,000 tons $300 millions would be earned. He said that millers would incur a loss of Rs 1.5 per kilogram every month till sugar stock are lying idle in warehouses.
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