The sugar industry stakeholders have called on the government to allow the export of surplus sugar and promote the free market economy.
“Last year, Pakistan produced 7.9 million tonnes of sugar, which is 40% (2.247 million tonnes) more as compared to that in FY2020-21,” noted Miran Mohammed Shah, President of the Sindh Chamber of Agriculture.
“If the decision-makers had considered this aspect, as opposed to only seeing the consumer side, they would have immediately allowed the export of one million tonnes of sugar, which would have earned the country approximately $600 million,” he added.
The sugar industry has been asking for permission to export the surplus amount for the last seven months, citing that the price of the commodity in the international market had dropped from US$560 per tonne to $528.7 per tonne to date.
The SCA president predicted that if an early decision was not taken, the prices would further decrease to $427 per tonne in February-March which would cause a colossal loss to the national exchequer in terms of exports revenue.
“The growers in Sindh have been badly affected by the torrential rains and floods. They were eyeing the sugarcane crop as a ray of hope for the coming crushing season. Despite destruction in certain parts of the province, the sugarcane crop seems to have survived and this may support farmers economically,” Shah explained.
“In case the government does not allow the export of surplus sugar, sugar cane growers of the entire country will face acute problems in securing payments in due time,” Shah forewarned.
According to data released by the Ministry of Food Security, at least 51,706 metric tonnes of sugar was available from the previous season while 70,000 tonnes of sugar, produced from beetroot, was available until the beginning of the last season.
“Given the current situation, the government should permit the export of one million tonnes of sugar, to save the sugarcane growers community and the sugarcane industry,” he added.
“As far as pricing is concerned, the millers have always demanded that the market mechanism should ascertain the price,” he added.
“Due to climate change, a sizable majority of the growers are also resorting to cane cultivation in place of other crops, which is likely to result in larger stocks of sugar in the future,” Shah expounded.
Currently, Pakistan’s daily domestic sugar consumption stands at approximately 15,980 tonnes, showing that at least 1,736,017 metric tonnes of surplus sugar will be available at the start of the next crushing season in November of this year.
Pakistan Businesses Forum (PBF) Vice President, Ahmad Jawad said, “The government should not be involved in setting the prices of sugarcane and sugar. It should let the market mechanism decide prices. However, the government should maintain strategic reserve stocks and intervene at the appropriate time to supplement the market and keep prices at a reasonable level.”
Published in The Express Tribune, October 12th, 2022.
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