Sugar producers want to export 1.5m tons

Demand surplus stock to be put to better use before crushing.

ISLAMABAD:

Pakistan’s sugar producers have asked the government to allow exports of up to 1.5 million tons to compete with India, which is extending incentives for exports of the sweetener.

The country’s mills are struggling to process sugar and sell it domestically because of a bumper crop, but would be shipping into a global market already burdened by oversupply.

“Today, we had a meeting with the commerce secretary during which we requested the government to allow the export of 500,000 tonnes of sugar immediately,” said Pakistan Sugar Mills Association Chairman Iskandar Khan on Thursday.

He added that, in total, producers sought to export up to 1.5 million tonnes of sugar, but did not specify whether it would be raw or processed.

“How are mills expected to start crushing when surplus stocks from the last crop are still lying around?” Khan asked. Pakistan’s commerce ministry was not immediately available for comment.

Traders said Pakistan’s possible emergence as a supplier had come as a complete surprise.

“This will become another challenge for the sugar industry that’s already struggling with oversupply. The Indian government will have to tailor its export incentives accordingly to help mills offload their inventory,” said a sugar trader with a big Indian trading house.

The Indian Sugar Mills Association, a body of private sugar mills, estimated in September that the country’s production this season will rise to around 25 million tonnes. 

Published in The Express Tribune, November 7^th, 2014.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.