Lahore: The Pakistan Sugar Mills Association (PSMA) has requested the federal Ministry of Industries and Production to allow the immediate export of 500,000 metric tons of surplus sugar, reported Brecorder.
The association claims that the sugar industry is facing some challenges, including high storage costs, low sugar prices, and a cash flow crunch. The PSMA believes that exporting 500,000 metric tonnes of surplus sugar would help to address these challenges and bring much-needed foreign exchange to the national exchequer.
In a letter addressed to Federal Minister for Industries & Production Dr Gohar Ejaz, the Pakistan Sugar Mills Association (PSMA) highlighted the challenges faced by the industry. According to the latest data from the Federal Board of Revenue (FBR), sugar stocks as of October 31, 2023, amounted to 1.13 million metric tonnes, sufficient for over two months based on the average offtake over the last 11 months. The PSMA argued that the new crushing season for 2023-24 was deemed economically unviable for the industry due to various impediments.
The association pointed out that the storage capacity of several sugar mills was already occupied due to existing stocks, and the unresolved liabilities with banks, coupled with high interest rates on undisposed sugar stocks, had exacerbated the cash flow challenges faced by sugar mills. Despite a court decision in the JS Bank case, banks had tightened credit lines for growers’ payments.
The PSMA noted that sugar prices were already below the higher cost of production due to constant increases in major cost components, including sugarcane prices, interest rates, and imported chemicals. Requesting permission to export 500,000 metric tons of surplus sugar, the association emphasized that this action would not only help the sugar industry navigate the imminent cash flow crunch but also ensure punctual payments to sugarcane growers and contribute much-needed foreign exchange to the national exchequer.
Highlighting a previous commitment, the letter reminded the government that, while allowing the export of 250,000 metric tons of sugar in January, a promise was made to the sugar industry that additional tranches of sugar export would be permitted subsequently. The PSMA-Punjab Zone requested the minister to schedule an early meeting with a delegation from the sugar industry to address the matter of surplus sugar export with the federal government, considering the aforementioned challenges.
