Friday August 19, 2022

Punjab asks Centre not to go for sugar exports

June 30, 2022

LAHORE: The Punjab government has asked the federal government not to allow sugar exports as the Pakistan Sugar Mills Association's claim of having huge surplus stocks is fallacious, reveal documents available with The News.

The PSMA has asked for sugar exports, claiming the country can earn one billion dollars from it. Pakistan needs to export almost two million metric tons of sugar to earn this money in

foreign exchange, as the current international FOB price of sugar is around $500/metric ton.

The Punjab government, in a letter to the federal food ministry, has stated that the PSMA is forcefully advocating for export of around one million metric tons sugar, citing surplus production during the ongoing season.

The Punjab government has mentioned that allowing sugar exports without assessing the actual domestic demand is unwise. Hot weather and limited rainfalls have resulted in a water shortage, affecting all the crops.

Reports suggest sugarcane crops are not in a good shape and it may affect its production. The Punjab government has advised that the country should go with the carryover stocks into the next crushing season to avoid any manipulation in domestic sugar prices.

Punjab Food Secretary Nadir Chattha, talking to The News, confirmed that the Punjab government had advised against sugar exports at the moment. “The sugar exports should not be allowed until the start of the next crushing season by mid November,” he said, adding that there should be some domestic surplus at the start of the next crushing season.

About the PSMA’s one billion dollar foreign exchange earnings by exporting sugar, Chattha said it could explain it better than him. He said that in Punjab, of the 4.1 million metric tons of sugar produced, 2.5 million metric tons had been consumed so far. “The country will not have such huge surplus of sugar to earn $1 billion from its exports,” he said.

When contacted, PSMA member Ch Waheed said the association would manage to bring $1 billion through exports. He, however, could not explain how could this target be achieved keeping in view of prevailing international market price. But, he said that the international price had come down to $500/ton from $570/ton. “We will bring $1 billion through exports,” he claimed and denied misleading the government by quoting wrong figures.