Claims linking sugar price hike to exports rejected by PSMA

LAHORE: The Pakistan Sugar Mills Association (Punjab Zone) on Friday once again rejected the impression that sugar prices are linked with its exports and said that some quarters under myopic considerations are continuously creating misunderstandings.

In a statement, the spokesman said that the sugar industry time and again categorically clarified that surge in prices are not attributed to exports. At the end of September 2024, industry had two years of surplus sugar production in pipeline (approximately 1.2 million metric tons valuing Rs. 250 billion) which was pledged with banks at nearly 25 percent interest rate. Had the government not allowed the exports, Pakistan’s sugar industry providing $5 billion of import substitution and world’s cheapest sugar would have collapsed.

The exports were allowed after much delay and after authenticating the stocks of huge surplus through multiple governmental sources.

Moreover in June 2024, it was mutually agreed with the government that ex-mill rate of sugar produced in Crushing Season 2023-24 and carry-over would remain Rs. 140 per kg during export period. He added that cost of production of sugar, mainly dependent on sugarcane prices, is different in every crushing season. In this season growers have received historically high rates of sugarcane up to Rs. 750 per maund which provided them and agriculture sector sustainability and prospects of better sugarcane crops in coming years. Hence linking the sugar prices with its exports at a certain point, for times to come, is completely biased and unjustified.

He further stated that sugar prices have been increased by influencing market forces through media campaigns by satta mafia, hoarders and karyana merchants for earning undue profits. He said the current price is agreed with the government by the sugar industry in the best interest of consumers for a month till April 19 while at the same time, domestic consumers are getting concessional sugar at Rs.130 per kg at 274 established stalls.

The sugar industry for past many years has been requesting the government that independent cost auditors should be appointed to verify and audit the cost of production of sugar, to make it more reliable and acceptable to all stakeholders.

The sugar industry has also urged the government to adopt two-tier mechanism for determining separate sugar prices as 80% sugar is consumed by the commercial sector and 20% is consumed by the domestic consumers. Commercial sector is completely unregulated and exempted from any price controls. Sugar Industry would encourage devising a support mechanism for domestic consumers in consultation with the government.

Copyright Business Recorder, 2025