Sugar surplus prompts export push

Chairman of the Pakistan Sugar Mills Association (PSMA), Chaudhry Zaka Ashraf, has urged the government to immediately allow sugar exports, deregulate the sector, and revive ethanol blending policies citing a projected surplus and rising inventory costs.

Addressing a press briefing on Monday, Ashraf said the sugar industry, Pakistan's second-largest agro-based sector after textiles, supports millions of livelihoods and generates over Rs1,000 billion annually in economic activity. It contributes approximately Rs300 billion in taxes and saves around $5 billion annually through import substitution.

Despite being one of the most documented and compliant sectors, he said the industry remains overregulated. While around 70% of production is deregulated, the domestic market continues to face controls on ex-mill prices, payment timelines, supply restrictions and penalties imposed by provincial authorities.

Ashraf noted that successive governments have promised deregulation, but these commitments remain unfulfilled. He stressed that policy consistency is essential for long-term growth.

He also highlighted the industry's contribution to energy generation through bagasse-based power, adding that surplus energy has supported allied industries and can further meet industrial demand.

Calling for revival of ethanol blending policies, he said models in Brazil and India show that blending ethanol with fuel can reduce dependence on imported petroleum. Policies introduced in 2006 and 2009 were later discontinued. He said up to 20% ethanol blending is achievable, which could save billions of dollars in import costs.

On capacity, Ashraf said the industry can produce up to 12 million tonnes annually, enabling exports of up to 6 million tonnes and generating around $4 billion in foreign exchange, while ethanol exports could add another $1 billion.

He said production has reached about 7.5 million tonnes and may rise to 7.7 million tonnes by season end, with total availability estimated at 8.071 million tonnes. Against domestic consumption of 7.02 million tonnes, a surplus of about 1.05 million tonnes is expected.

Given rising costs and excess stocks, he urged immediate export approval to stabilise the industry and generate foreign exchange.