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ISLAMABAD: The Pakistan Sugar Mills Association (PSMA) has approached the Commerce Ministry to seek permission for the export of “expensively produced” sugar, aimed at finding a reason for the increase in its prices in the domestic market, well-informed sources in the Commerce Ministry told Business Recorder.

Mills purchased sugarcane at a price as high as Rs600/ 40kg as against the support price of Rs400/ 40kg in Punjab and Rs425/ 40kg in Sindh.

During the crushing season, mills locked horns with one another for procurement of sugarcane at any cost despite the fact that crop size was adequate and sugar produced was almost more than last year. After having committed the mistake of buying sugarcane at higher rates the cost of production of sugar went very high. Now PSMA has sought export permission to jack up the price and fleece the masses.

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According to PSMA’s letter to the commerce minister, the sugar industry is the second largest agro-based industry of Pakistan after textiles. It generates direct and indirect business activity of Rs800 billion to Rs1,000 billion annually in agriculture, transport, allied industries, wholesale and retail markets. It pays around Rs125 billion in direct and indirect taxes to the federal, provincial and local governments. It provides direct employment to 1.5 million people and renders 5 billion USD worth of import substitution to the national economy.

The PSMA, in its letter, has apprised the commerce minister that surplus sugar production has been achieved at the end of crushing season 2023-24. Total available sugar in the current year is 7.5 MMT against an annual consumption demand of 6.00 MMT, having a surplus of 1.5 MMT.

“Continuous record sugar production every year is a blessing for the country; however, there is an urgent need to arrange for the disposal of surplus sugar to enable sugar mills to pay off sugarcane growers,” PSMA said, adding that it is imperative to formulate a policy for export of minimum 1.00 MMT of sugar in two tranches of 0.5 MMT each without putting any extraneous conditions like time limits to fetch best possible rates and to avoid international buyer’s exploitation.

The PSMA is of the view that a window of sugar export is currently available to Pakistan due to currency depreciation and the Indian ban on the export of sugar due to its local demand and increase in ethanol production.

Copyright Business Recorder, 2024

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Az_Iz Apr 03, 2024 06:12am
Sounds reasonable. It can fetch hundreds of millions of foreign exchange.
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Mushtaque Ahmed Apr 03, 2024 08:44pm
Why not import sugar at a lower price from the international market? Current sugar policy is pivoted on high support sugar-cane price leading to high local production cost. Then seek government subsidy to export the surplus sugar and in the process divert tax payers money to the elite sugar mill owners. A government-sugar mill owners hand-in-glove sugar policy approach to fleece the common sugar consumers.
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Mushtaque Ahmed Apr 03, 2024 09:19pm
Sugar-cane is very high water intensive crop that matures after a year. Already 30% warer shortage has been reported for current Kharif crop. Over the years climate changes will likely result in drastic reduction in sugar-cane produce due to water crisis. So a sugar policy review should be undertaken. If the sugar policy makers fail to see the above, nature will force an end to the current merry-go-round sugar policy tilted towards the elite and highly detrimental to the comman man.
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