Pakistan : Sugar mills seek deregulation, 800,000-tonne exports
Pakistan’s PSMA has urged complete sugar-sector deregulation and immediate permission to export another 800,000 tonnes, warning that 1.25 million tonnes of existing surplus plus an estimated 1.5 million tonnes from the next crop could create storage, financing and working-capital pressures before November’s crushing season.
The Pakistan Sugar Mills Association (PSMA) has called for complete deregulation of the sugar sector and immediate permission to export another 800,000 tonnes of sugar, warning that mounting surplus stocks could create storage and working-capital constraints ahead of the new crushing season.
The association’s general body reiterated its longstanding demand for complete deregulation of the sector, arguing that the sugar industry should be allowed to operate according to free-market principles.
The PSMA maintained that farmers would be the primary beneficiaries of deregulation as they would have greater access to international market-linked prices for their produce.
It warned that if the sector remained subject to the existing regulatory framework, growers could gradually shift away from sugarcane cultivation, potentially forcing Pakistan to spend substantial foreign exchange on sugar imports to meet domestic requirements.
The association also claimed that several sugar mills were currently closed. It argued that deregulation would allow mills to freely import raw sugar when required and process locally produced sugarcane according to market conditions.
The PSMA urged the government to move towards complete deregulation to ensure market-based operations, facilitate farmers and maintain the viability of the sugar industry.
The association also welcomed the government’s decision to allow the export of 200,000 tonnes of surplus sugar but said this should be followed by immediate permission to export the remaining stocks of 800,000 tonnes.
According to a PSMA spokesman, the sugar industry has been consistently requesting the government since February 2026 to allow the immediate export of surplus sugar produced at the end of the 2025-26 crushing season.
Through official meetings, letters and press releases, the industry had repeatedly informed the government that the country was holding a surplus of around 1.25 million tonnes of sugar.
It had proposed exporting one million tonnes, arguing that the move would help safeguard farmers’ interests while generating much-needed foreign exchange for the country.
The association warned that the new crushing season was less than two months away and that any delay in clearing surplus stocks could create serious difficulties for both sugar mills and growers.
According to the PSMA, mills were incurring substantial additional costs on carrying surplus stocks, including mark-up on bank financing.
At the same time, production costs had increased considerably because of higher sugarcane prices, taxes, wages and the cost of imported chemicals, while domestic sugar prices remained below production costs, it claimed.
The association said the resulting financial pressure could affect mills’ ability to offer competitive sugarcane prices to growers and could also create difficulties in starting the new crushing season on time.
With less than two months remaining before the start of the new crushing season, large quantities of sugar were still lying in warehouses. The PSMA said that with mills already facing financial constraints, the accumulation of carryover stocks could result in an acute shortage of working capital required for crushing operations.
The association said the situation was particularly concerning because the upcoming sugarcane crop was estimated to produce an additional surplus of around 1.5 million tonnes of sugar.
Combined with the existing surplus of 1.25 million tonnes, this could leave the industry dealing with around 2.75 million tonnes of existing and additional surplus sugar, creating serious storage constraints.
The PSMA warned that low exports and the high cost of maintaining carryover stocks could make it extremely difficult for mills to maintain continuity of crushing operations during the season beginning in November 2026.
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Source : Profit by Pakistan Today
