ISLAMABAD: Pakistan's sugar producers have asked the government to allow exports of up to 1.5 million tonnes of sugar to compete with India, which is extending incentives for exports of the sweetener.
The country's mills are struggling to process sugar and sell it domestically because of a bumper crop, but would be shipping into a global market already burdened by oversupply.
"Today we had a meeting with the commerce secretary during which we requested the government to allow the export of 500,000 tonnes of sugar immediately," Chairman of the Pakistan Sugar Mills Association Iskandar Khan told Reuters on Thursday.
He added that in total producers sought to export up to 1.5 million tonnes of sugar, but did not specify whether it would be raw or processed.
"How are mills expected to start crushing when surplus stocks from the last crop are still lying around?" Khan asked.
Pakistan's commerce ministry was not immediately available for comment. Finance Minister Ishaq Dar has been quoted by local media as saying that the government would take issues facing the sugar industry into consideration.
Traders said Pakistan's possible emergence as a supplier had come as a complete surprise.
"This will become another challenge for the sugar industry that's already struggling with oversupply. The Indian government will have to tailor its export incentives accordingly to help mills offload their inventory," said a sugar trader with a big Indian trading house.
Benchmark New York sugar prices fell to multi-year lows in September due to abundant global supplies from countries such as Brazil and India, the top two producers.
The Indian Sugar Mills Association, a body of private sugar mills, estimated in September that the country's production this season will rise to 25.0-25.5 million tonnes from 24.3 million tonnes a year ago.
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