ISLAMABAD:
Pakistan has signed deals to export 250,000 tons of sugar, after the government approved a subsidy of $100 per ton in December for overseas sales of 650,000 tons of the sweetener lying in mills, said a top industry official.
Rising shipments from Pakistan in an amply-supplied world sugar market could further depress the benchmark New York prices that sank to their lowest level since 2010 on Tuesday and are on track for their fifth consecutive annual drop.
Mills in Pakistan have sealed export deals at $370-$400 a ton for prompt deliveries to the buyers in Africa, Central Asia and the Middle East, said Pakistan Sugar Mills Association Chairman Iskander Khan. Pakistan produces about 6 million tons of sugar but consumes only around 4.5 million a year. It has been struggling to export the sweetener to shore up the deteriorating financial health of its mills hit by two straight years of surplus output, which has hammered domestic prices.
“We are making sugar for Rs64 per kg and selling at Rs45 per kg. How will I pay farmers?” asked Khan.
The weak local prices could force about 20 sugar companies to shut shop, he said.
Published in The Express Tribune, March 11th, 2015.
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