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Sunday April 21, 2024

Industry body seeks govt nod to export 1m tonnes of sugar

Afghanistan & Central Asian countries are importing expensive sugar from India while due to low freight

By Mehtab Haider
April 03, 2024
A representational image showing a labour carrying a sugar bag. — AFP/File
A representational image showing a labour carrying a sugar bag. — AFP/File

ISLAMABAD: The sugar industry has kick-started lobbying for seeking government’s permission to export one million tons of sweetener from Pakistan.

The Pakistan Sugar Mills Association (PSMA) has written a letter to Minister for Commerce Jam Kamal and requested him that the government may take a timely decision in the national interest to allow export of sugar in two tranches of 0.5 MMT each on quota basis as was done in January 2023. Afghanistan & Central Asian countries are importing expensive sugar from India while due to low freight, Pakistan has competitive advantage in getting feasible import contracts from these countries.

In the past when sugar was exported, it was made sure that the prices of sugar in the domestic market would not escalate but a few years back the prices went up locally. Now the PSMA stated 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 worth of import substitution to our national economy. The PSMA said 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.

Whereas continuous record sugar production every year is a blessing for the country, there is an urgent need to arrange for the disposal of surplus sugar to enable sugar mills to pay off sugarcane growers. It is, therefore, 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 said window of sugar export is currently available to Pakistan due to currency depreciation and Indian ban on export of sugar due to its local demand and increase in Ethanol production. Export of sugar will fetch much needed foreign exchange to the tune of $0.7 billion for our reserves. The government may also purchase 0.5 MMT of sugar to create a strategic reserve. It said the export of refined sugar at present is strictly controlled and managed by federal government to ensure supply of sugar at affordable price to the common man whereas 70% of sugar in Pakistan is consumed by commercial sector. Despite paying up to Rs500/40 Kg for sugarcane this year, we are continuously producing cheapest sugar for our local consumption. Sugar industry of Pakistan can achieve annual sugar production of 12.00 MMT without any further investment, capacity enhancement and involvement of foreign exchange expenditure. It can produce 6.00 MMT exportable surplus sugar each year and we can earn $4.5 billion annually through export of sugar with an additional 1.00 billion through Ethanol exports.