Pakistan : Govt weighs sugar export request as fears of price hike resurface
Pakistan sugar mills are seeking approval to export 1 million tonnes of sugar, but the government fears a repeat of last year’s domestic shortage and price surge. Officials are reviewing stock data amid concerns that reported surplus includes imported sugar, potentially reducing actual exportable availability.
LAHORE: Sugar mill owners have renewed their push to export one million tonnes of sugar, prompting concerns of a repeat of last year’s price spiral at a time when households are already grappling with high inflation and fuel-driven transport costs.
Media reports quoted officials saying the Pakistan Sugar Mills Association (PSMA) has formally sought government permission for the exports and submitted data on production and available stocks. The Association claims the country’s total sugar output stands at 7.8 million tonnes, leaving an excess of one million tonnes that can be shipped abroad without affecting local supply.
However, the government has begun scrutinising the figures amid apprehensions that the declared stock includes around 300,000 tonnes of imported sugar. If confirmed, that would reduce the actual surplus to 700,000 tonnes, raising the risk of a domestic shortfall should exports of one million tonnes go ahead.
A committee headed by Deputy Prime Minister Ishaq Dar is expected to decide the matter after reviewing data from both the mills and the Cane Commissioner’s office. Officials said the review will focus on reconciling production, consumption, carryover stocks and the quantum of imported sugar in godowns.
The request has revived memories of last year, when mills were allowed to export sugar after declaring surplus stocks. The move was followed by a shortage in the domestic market as exports picked up, triggering a sharp increase in retail prices. The government was later forced to import sugar at higher international rates to stabilise supply — a decision that weighed on already strained foreign exchange reserves.
The timing of the latest request has drawn attention given Pakistan’s economic instability. With diesel prices keeping freight costs high, any tightening of sugar supply could quickly translate into higher shelf prices. Sugar is transported across the country by road, and traders typically pass on both supply risks and transport costs to consumers.
Analysts note that annual domestic consumption is estimated at 6.5 to 7 million tonnes. Exporting one million tonnes from a declared production of 7.8m would leave little buffer for contingencies, including smuggling, hoarding, or weather-related crop damage.
The development also comes as the government circulates a policy to deregulate the sugar sector. Once implemented, deregulation would allow mills to decide on exports without prior state approval. Critics argue that without real-time stock monitoring and anti-hoarding safeguards, deregulation could increase price volatility.
For now, stakeholders from growers to consumers are awaiting the Dar-led committee’s decision. The outcome will signal whether the state prioritises foreign exchange earnings from sugar exports or price stability for households already facing rising costs of essential commodities.
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Source : MM News
