Pakistan: PSMA warns of delayed crushing season amid unresolved sugar glut
Pakistan Sugar Mills Association warned that the sugar industry faces a financial crisis after prices fell up to 25% year-on-year, causing Rs98 billion in losses. With 1.3 million tonnes of surplus stocks and 12 mills already closed, PSMA urged the government to permit additional exports ahead of expected record production.
LAHORE: Pakistan Sugar Mills Association (PSMA) North Zone has claimed that the sugar sector continues to face financial crunch, exacerbated by delays in policy decisions by the government.
A spokesman for the PSMA, while citing weekly data from the Pakistan Bureau of Statistics, said here on Sunday that sugar prices had declined by up to 25 per cent over the past year. During this period, the sugar industry incurred losses amounting to Rs98 billion. Since closure of crushing season 2025-26, the PSMA time and again indicated availability of huge surplus of 1.3MMT in the country but repeated requests for timely export of surplus sugar had been ignored by the government which put the industry in serious financial crisis.
At least 12 sugar mills across the country have already shut down due to losses and many others are on the verge of closing down. Sugar industry may not be in a position to timely start upcoming 2026-27 crushing season due to huge stockpile and pay better prices to sugarcane farmers like in previous years. It will be disastrous for sugarcane farmers and our agricultural economy, the spokesman said.
The sugar surplus of 1.3 Million Metric Tons caused huge losses to the sugar industry. Due to glut and resultant depressed sugar prices, it remained unable to recover its cost of production or any profit margin. Notwithstanding sugar industry had to incur carrying costs on surplus stocks, in the shape of financial charges on bank loans. While at the same time sugar prices in Pakistan are lowest in the world, in spite of highest sales tax rates.
Unless at least 1MMT of surplus sugar is exported, the above situation is more likely to worsen further when new sugar of coming crushing season will arrive. In forthcoming crushing season which is hardly a month away another record sugar production of approx. 8.50MMT is expected.
Sugar industry earnestly appeals to the federal government to immediately grant 0.8MMT sugar export permission in addition to permission of 0.2MMT already granted. Moreover government should completely de-regulate sugar sector enabling it to work on free market principles. Otherwise not only sugar industry and farmers would suffer but the country might regularly be importing sugar for domestic use, by spending much needed foreign exchange, instead of earning it through sugar exports.
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Source : International The News
