Surplus refined sugar: Govt rejects PSMA’s request to export

ISLAMABAD: The government has refused to allow Pakistan Sugar Mills Association (PSMA) to export over 0.6 tons of surplus refined sugar, saying that in this direction final decision will be taken after the start of new crushing season.

Senior officials of the ministry of industries and production said that government considering the previous practices in mind has deferred Immediate sugar export proposal to prevent local price hike.

A subcommittee chaired by Deputy Prime Minister Ishaq Dar decided that the export of surplus sugar will be considered once the onset of the new crushing season to prevent local market shortages and price hikes.

Sugar mills have claimed a surplus of 1.3 million metric tons of sugar and sugar exports would generate over USD500 million in foreign exchange.

Last year, after sugar exports were permitted, retail prices in the domestic market crossed in some parts of the country Rs250 per kg and even in urban areas sugar price touched Rs220 per kg, which now is hovering in the range of Rs150-160 per kg.

The government aims to prevent a situation where it has to import sugar later at higher rates to meet local demand. Delaying the decision until the next crushing season ensures domestic supply security and keeps local prices stable.

According to PSMA officials, in case the government was now allowing sugar export, it will create serious challenging situation for the millers to offer better crop rates to farmers during the upcoming crushing season, which will create another kind of crisis.

According to sugar mills industry currently domestic sugar prices are even below the cost of production and globally white sugar prices are currently hovering around USD455 to USD465 per metric ton on global commodity markets. They said that if the government was granting sugar export permission the industry by selling half of the surplus stock can generate at least USD273 million, while exporting one million ton of the commodity will generate USD445 million.

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