Govt reluctant to allow sugar export on low stocks, flood effect

Our Correspondent
Thursday, Nov 24, 2022

LAHORE: Government refused to grant sugar industry the permission to export the commodity in view of the low stocks, especially because it anticipates lower sugarcane production in the aftermath of the devastating floods.

The industry, however, has been adamant about sufficient stocks of sugar, and has been seeking out the government so it could get permission to export the commodity.

Pakistan Sugar Mills Association (Punjab Zone) spokesman on Wednesday categorically denied the notion regarding shortage of sugar in the country by the Ministry of National Food Security and Research and the Ministry of Industries and Production.

He claimed that the ample sugar stocks were to the tune of 1.2 million tonnes. He said the industry has constantly been appealing the government for the last one year to allow the export of surplus sugar, so it could be released from the banks and new working capital be provided by the banks.

The government has also verified the current stocks of sugar through the Federal Board of Revenue’s Track and Trace System installed in every sugar mill.

Moreover, other government departments have also confirmed ample stocks of sugar, but the issue was still lingering on for the last one year, when 2 million tonnes of excess sugar was produced in the country.

In 2017-18, a similar situation was faced by the sugar industry and resultantly, the farmers and the industry had to suffer.

He added that if the government increases the support price of sugarcane by 35 percent, the sugar price has to be increased by 35 percent, which would come to Rs115/kg.

“Surplus stocks of sugar are available till January 2023 and government must give due consideration to this matter at the earliest,” the spokesman said, adding that according to Pakistan Economic Survey 2021-22, 8 million tonnes of sugar was produced in the country which was also verified through the Track and Trace System.

Average consumption of sugar in Pakistan during 2022-23 was estimated at 6.8 million tonnes. This means that 1.2 million tonnes of sugar was in surplus stocks before the start of the next crushing season.

If this surplus stock was not exported, it would create a crisis-like situation for the sugar industry.

The spokesman said that India has exported 6 million tonnes of sugar and converted the remaining into ethanol to save foreign exchange. Other sugar-producing countries were also exporting their sugar after meeting their domestic demand, but free trade was not being promoted in Pakistan.

The association’s spokesman said that if permission was not given to export surplus sugar, the industry would not be able to pay growers, while it would also be not possible to begin the crushing season in stipulated time.

If the sugar mills do not get the required quantity of sugarcane for crushing, it is not possible make sufficient amount of sugar to meet the consumers’ demand, which would force the government to import the commodity.

“Pakistan shall remain in the export market to save billions of dollars in foreign exchange,” the spokesman added.