ISLAMABAD: The Pakistan Sugar Mills Association (PSMA) has sought government’s permission to export more sugar, arguing that the country has over 1.08 million tons surplus sugar stocks at the start of new crushing season.
The PSMA officially sought permission in this connection, here on Thursday, during the meeting of the Sugar Advisory Board (SAB) which was held under the chairmanship of Federal Minister for Industries and Production, Rana Tanveer Hussain.
The government after receiving the PSMA’s fresh request for additional sugar export advised the sugar industry that the government is not going to consider any such request till the industry is not exporting already allocated export quota of 790,000 tons.
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The PSMA officials informed the meeting that China have annual import demand of six million tons, therefore, the government is requested for G2G or G2B facilitation for sugar export to China.
The board meeting was also attended by other stakeholders including PSMA to discuss and review the sugar stock availability, commencing of new sugarcane crushing season, current market prices, sugarcane rates, present global market sugar prices, and industry production cost.
The minister directed the PSMA to ensure the allowed quantity of sugar export within the due time which was set for three months as decided on October 8, 2024,and local commodity prices must remain stable so that the consumers cannot suffer as witnessed in the past. According to an official presentation, the industry so far has exported only 186,934 tons out of 790,000 allocated quota for export as 603,066 tons of permitted quota for exports is yet not utilised.
During the meeting, the representatives of the PSMA informed the government officials that Pakistan this year has over 1.7 million tons of additional sugar which should have been exported.
While the government in June 2024 allowed PSMA to export 150,000 tons sugar which in August was further extended by 100,000 tons and 40,000 tons sugar export was allowed on government-to-government basis to Tajikistan and on October 8, 2024, the government allowed the sugar industry to export 500,000 tons.
According to cane commissioner sugar offtake/consumption report in past 11 months, a total 6.2 million tons of sugar was consumed locally and so far the exporters have managed to export a total of 186,934 million tons. The data shows that on average, 545,000 tons of sugar was used including local consumption and exported quantity.
During 2023-24 crushing season, Pakistan has produced a total of 6.843 million tons of sugar, of which, 4.37 million tons was produced in Punjab, 2.022 million tons in Sindh and 447,000 tons in Khyber Pakhtunkhwa (KPK).
While the country had a total of 823,000 million tons of carryover sugar stocks during the season, of which, 517,000 tons with Punjab’s mills, 191,000 tons with Sindh’s mills and 115,000 stocks by KPK mills,thus, having a total quantity of 7.664 million tons.
The meeting directed the sugar mills to start new sugarcane crushing season on November 21, 2024, those who failed to comply with the directions will face serious consequences including withdrawal of sugar export permission. The minister directed the members of PSMA to clear all the outstanding dues of the farmers before the start of the new sugarcane crushing season.
In June this year, the PSMA had suggested the government to allow export up to one million tons of refined sugar in the first phase which will bring around $650-700 million foreign exchange for the country and the rest of the 0.6 million tons of sugar be exported in two phases.
According to PSMA officials, last year sugarcane price was fixed at Rs350 per 40kg which in 2023-24 reached Rs450 per 40-kg and the production cost of sugar at present stands at Rs170 per kg while in the retail market, refined sugar was available in the range of Rs140 per kg which is the lowest price in the world.
The meeting was informed that within past one month, sugar price in the wholesale market has reached to Rs6,400 per 50-kg bag which is lowest in two years’ period.
The PSMA officials said locally, the sugar production price was around $503 per ton while in the international market, as of November 6, 2024, it stands at $562 per ton, therefore, export permission will benefit both the industry and the country.
The meeting was further informed that in Pakistan industrial use of sugar stands at 85percent and the rest 15 percent was domestic use. Moreover, 18 percent general sales tax (GST) was imposed on sugar.
Copyright Business Recorder, 2024
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