Pakistan sugar mills seek govt nod for exports to avoid crisis
The Pakistan Sugar Mills Association (PSMA) has urged the federal government to allow the export of 1.5 million tons of surplus sugar, potentially earning $850 million in foreign exchange. The PSMA highlights that delays in policy decisions have already cost the country significantly, as international sugar prices have dropped from $750 to $510 per ton. With high production costs and excess inventory, the industry faces financial strain, particularly with the next crushing season approaching in November 2024.
Islamabad: The Pakistan Sugar Mills Association (PSMA) has urged upon the federal government to urgently fulfil demands of the sugar industry to permit them to export surplus sugar to earn handsome foreign exchange for the country, reports The Nation.A spokesman of PSMA (Punjab Zone) stated here on Wednesday that the country can make $850 million through exporting the surplus sugar which is continuously reported to be standing at exorbitantly higher levels of 1.5 million tons by various meetings of the Sugar Advisory Board over and above the country’s local requirement of the commodity.
In this regard, PSMA emphasized that the sugar mills now have surplus stocks of a hold-up of Rs210 billion and international sugar prices have reportedly declined about 32% to $ 510 per ton from $ 750 since the PSMA submitted an appeal for permissions to export. The delay in policy decisions has cost the country a significant opportunity to build the much-needed national exchequer.
The spokesman elaborated that the prevailing prices of sugar are below the cost of production, which has been pushed up by high prices of sugarcane, interest rates, taxes, wages and imported chemicals. After the end of the last crushing season, the sugar mills have been facing extra carrying costs like bank mark-up charges of Rs2.25 per kg per month plus other maintenance costs. This was aside from the fact that the glut in the market has also left the industry without any local buyers.
With inventories piling up and the need to move the stocks of the surplus on one side, and increasing costs with the carryover inventory on the other, the PSMA warned that the next crushing round of the season, which should begin in November 2024, would be very unsustainable, particularly for the small players. It is well-assured that the next sugarcane crop will be another bumper yield, generating between 1.5 to 2.0 million metric tonnes of additional sugar production. The industry now faces a critical shortage of storage space, with only two months remaining for the next season.
In its last appeal, the PSMA has prayed for an immediate permission of the government to allow the export of the entire surplus stock of sugar in the national interest. The step, they claimed, is necessary to help in the survival and viability of an industry that has significance not only for sugar but also towards meeting the expectations of sugarcane growers all over the country.
Source Link : https://www.chinimandi.com/pakistan-sugar-mills-seek-govt-nod-for-exports-to-avoid-crisis/
