Lahore: The Pakistan Sugar Mills Association (PSMA) – Punjab Zone has rejected allegations that sugar exports have led to an increase in local prices, reports The Express Tribune.
The spokesperson for the association clarified issuing a statement stating that recent media reports linking the sugar price hike to exports were misleading and not based on factual evidence.
He explained that delays in granting export permissions created liquidity challenges for sugar millers. By the end of September 2024, the industry had accumulated two years’ worth of surplus sugar—approximately 1.5 million metric tons valued at Rs250 billion—pledged with banks at an interest rate of nearly 25%.
“This stockpile was maintained even though sugar has a storage life of only two years, after which it becomes unfit for human consumption,” the spokesperson added.
He further noted that when the government first allowed exports, an agreement was in place to ensure that ex-mill sugar prices would not exceed Rs140 per kg during the export period. However, due to the significant surplus, prices remained well below this threshold for several months. “Almost half of the total available sugar was sold below the cost of production, resulting in heavy losses for the industry,” he said.
Discussing the current market situation, the spokesperson highlighted that the latest sugarcane harvest has been affected by multiple factors, including pest attacks, adverse weather conditions, and climate change. These challenges have led to lower sucrose content and reduced crop yields. Additionally, he noted that sugarcane prices have risen sharply, with growers receiving Rs650 per maund.
The PSMA emphasized that multiple factors are influencing sugar prices and reiterated that exports should not be solely blamed for the increase. The industry continues to face financial and operational hurdles due to delayed export approvals and rising input costs.
