By Staff Reporter
KARACHI: Pakistan’s sugar milling industry is pressing the government for urgent export clearance, warning that a record domestic surplus is choking cash flows, imperiling farmer payments and threatening to unravel two years of hard-won gains in the country’s sugarcane sector.
The Pakistan Sugar Mills Association wrote to Deputy Prime Minister Ishaq Dar on Sunday, urging him to convene an early meeting of a cabinet committee formed to deliberate on the industry’s export request. The association estimates that selling surplus stocks abroad would generate nearly $500 million in foreign exchange — a meaningful fillip for an economy that has leaned heavily on IMF support and stringent import controls to stabilize its external accounts.
Total domestic sugar stocks have climbed to 7.9 million metric tons following the 2025-26 crushing season, against annual consumption of roughly 6.6 million tons — leaving an overhang of approximately 1.3 million tons. Even after setting aside a one-month strategic reserve, exportable surplus would amount to around 760,000 tons, the association said.
“Prices of sugar are much lower than its high cost of production due to constant increases in major input cost components, causing colossal losses to the sugar industry,” PSMA Chairman Chaudhry Zaka Ashraf wrote in the letter, adding that mounting inventories were creating severe cash-flow strains that were hampering mills’ ability to service bank loans and clear outstanding payments owed to cane farmers.
The urgency of the request is amplified by what the industry describes as a virtuous — and now fragile — cycle. Better mill payments to farmers over the past two seasons encouraged investment in improved seed varieties and agricultural inputs, driving up per-acre yields and sugar recovery rates. That productivity jump is now expected to produce yet another record cane harvest, potentially generating a further surplus of close to two million tons in the coming season, valued at between $1.5 billion and $2 billion.
The PSMA warned that without prompt policy action, financially distressed mills may be unable to offer competitive cane prices in future seasons, reversing farmers’ recent income gains and discouraging the very investments that lifted productivity.
The industry’s appeal carries an awkward history. On several past occasions, sugar millers secured export permissions by pledging to hold domestic retail prices in check — commitments they subsequently failed to honour, triggering consumer price spikes that embarrassed the government. That track record is likely to weigh on cabinet deliberations, even as mills argue that the current surplus leaves little risk of a domestic supply squeeze.
The federal cabinet has already constituted a committee, chaired by Dar, to review the export request — a step the PSMA acknowledged in its letter. The association is now asking to place a delegation before that committee to present its case directly, citing what it called rapidly shifting geopolitical conditions as adding further time pressure to the decision.
Pakistan’s foreign-exchange reserves, while recovered from crisis lows, remain under scrutiny by international creditors. A $500 million export receipt, if realised, would provide modest but tangible support to the current account at a moment when the government is navigating the terms of its ongoing IMF program.
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