LAHORE: The Pakistan Sugar Mills Association (Punjab Zone) reiterated its demand on Monday to allow the mills to export 1.5 million tons of sugar, which is more than the domestic need and can generate $850 million for the country.
The PSMA claims that despite confirmation of surplus stocks in multiple meetings, the government is delaying policy decisions on the pleas of the sugar industry to earn valuable foreign exchange for the country by exporting surplus sugar.
The Association appealed to the government, saying that $850 million could be generated by exporting surplus sugar stocks ascertained through different credible sources in many Sugar Advisory Board meetings as 1.5 million tons in excess of our domestic need. The huge financial resource of sugar mills is stuck in surplus stocks worth Rs 210 billion.
“The current international price of sugar has gone down to $510 per ton from $750 per ton 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,” the Association claimed.
Sugar prices are already much lower than their higher cost of production due to constant increases in major cost components like sugarcane prices, interest rates, taxes, wages, and imported chemicals. Since the closure of the last crushing season, sugar mills have been bearing additional carrying costs of surplus stocks, which include bank markup at the rate of Rs 2.25 per kg per month besides incurring other maintenance costs. No local buyers are available due to a glut-like situation and the industry is held up with surplus stocks, a PSMA spokesman claimed.
He further said due to minimal exports out of huge surplus stocks and extraneous expenses on carryover stocks, the 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 tons as two months are left for the next crushing season. The industry has no space to stock sugar produced in the next season.
The sugar industry repeated its demand that the government urgently allow the export of whole surplus sugar stocks in the 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.
Copyright Business Recorder, 2024
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