Meeting sought: Millers press govt to allow surplus sugar export

Say they will not be able to pay cane growers in the absence of exports

LAHORE: The Pakistan Sugar Mills Association Punjab Zone (PSMA), while not agreeing with the government’s policy that does not allow further export of surplus sugar, has asked authorities to call an immediate meeting in order to address concerns of the industry.

This year, the country has recorded a sharp rise in sugar production with surplus estimated at 1.8 million tons before end of the current crushing season.

In a statement, the association argued that unless the surplus was disposed of through exports, the industry would be unable to pay sugarcane growers.

Already, protests have erupted in some parts of Punjab where mills have failed to clear their dues and the situation will worsen at the start of new crushing season in November when another bumper crop is expected.



“The government has direct control over the major cost component of production along with sugar output and for this reason the industry always depends on policies that are being framed by the authorities,” the PSMA said.

It insisted that despite permission for export of 300,000 tons - a small quantity in the face of a huge surplus, it was impossible for the industry to make shipments without subsidy, keeping in view the current world commodity prices.

The association pointed out that world sugar prices, similar to other commodities, followed a cyclical pattern and in early part of the current calendar year, prices were at a level where industry would have exported the surplus quantity without any subsidy.

However, at that time, the authorities refused to allow exports despite repeated requests by the industry.

It emphasised that not many options were available with the industry to manage the situation and the government should come up with corrective measures by either buying the surplus stock as strategic reserves or subsidising exports in order to support the industry along with thousands of farmers.

“If necessary steps are not taken, mills will not be in a position to pay sugarcane growers the price anything more than Rs120 per 40kg,” it warned.

Government officials, however, fear that if sugar export is allowed without any check, it will spark instability in the domestic market and prices will shoot up, which will not bode well for an already troubled PML-N administration ahead of general elections next year.

Published in The Express Tribune, July 25^th, 2017.

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