Pakistan sugar mills push for export approval as government reviews 1.3M ton surplus claim 

PAKISTAN – Pakistan’s renewed debate over sugar exports has intensified after the Pakistan Sugar Mills Association (PSMA) urged the government to approve overseas shipments, citing a significant domestic surplus.  

The proposal has raised concerns about potential impacts on local prices, supply stability and regulatory oversight of the sector. 

In a letter dated May 31 to Deputy Prime Minister Ishaq Dar, PSMA Chairman Chaudhry Zaka Ashraf said Pakistan currently holds 7.9 million metric tons of sugar stocks against annual consumption of 6.6 million tons.  

The association estimates a surplus of 1.3 million tons and argues that exports are necessary to ease financial strain on mills, support loan repayments and clear dues owed to sugarcane farmers. 

“The association argued that exports are necessary to ease financial pressure on sugar mills, enable loan repayments and clear pending dues owed to sugarcane growers,” the PSMA said in its submission, adding that sugar exports could generate nearly US$500 million in foreign exchange earnings. 

The proposal comes amid heightened sensitivity around sugar pricing in Pakistan, following a previous export decision in 2024 that was followed by sharp domestic price increases. 

Retail prices reportedly rose from around Rs140 per kilogram to as high as Rs210 per kilogram in some markets, prompting the government to import 750,000 metric tons to stabilise supplies. 

Market traders say export approvals often tighten domestic availability. “When international prices become more attractive, mills tend to prioritise exports, which reduces local supply and drives prices upward,” said one wholesale trader familiar with the sector. 

Concerns over market conduct in the sugar industry have also resurfaced. Past investigations by authorities have alleged coordinated behaviour among major sugar producers, including stockpiling and supply manipulation practices that contributed to price volatility. 

The industry remains highly concentrated, with a limited number of politically connected groups controlling a significant share of Pakistan’s 91 sugar mills. Regulatory scrutiny has also persisted. In 2021, the Competition Commission of Pakistan imposed a Rs44 billion penalty on PSMA over alleged price-fixing and coordinated supply controls, though legal challenges later reduced its impact. 

Officials from the Ministry of Commerce said stock figures submitted by the industry are still under verification.  

“We suspect that around 300,000 metric tons of imported sugar may have been included in the reported stock numbers,” an official noted, warning that this could affect the estimated exportable surplus. 

A cabinet committee led by Ishaq Dar is expected to review the proposal in the coming weeks, with the final decision likely to influence domestic prices, supply dynamics and the broader direction of Pakistan’s sugar policy. 

Sign up HERE to receive our email newsletters with the latest news and insights from Africa and around the world, and follow us on our WhatsApp channel for updates.