Pakistan Sugar Mills Association (PSMA) has announced that they have a surplus of around 1.3 million tonnes of sugar stored in their inventories. As of July 31, 2022, a total of 3.03 million tons of sugar is still available to the sugar mills. On top of that, multiple regions in Pakistan recorded heavy rainfall which directly shows the promise of a good yield next season. A lot of factors clearly show that there will be a surplus of sugar to the tune of 3 million tonnes.
Pakistan High on Sugar?
PSMA leadership in a letter to Prime Minister Shehbaz Sharif shared the consumption estimates of sugar. It is expected that 1.8 million tonnes will be consumed, counting the needs of the upcoming crushing season. This still leaves Pakistan with a definite surplus of sugar to the tune of 1.2 million tonnes. PSMA is not looking forward to keeping the surplus within the country as it’d create complications. The excess sugar would directly lower the market prices of the commodity. This would lead to local producers even failing to recover their production costs. Surplus sugar stocks invariably create a financial crisis for the sugar mills as well as the sugarcane producers. The government of Pakistan, in order to ease sugar sellers to liquidate their sugar stocks and also handle the next year’s expected surplus stocks, may immediately allow the export of surplus Buy Bulk Sugar Online.
For multiple reasons, some domestic, and some global, producers are finding it hard to match the cost of production as the prices for agricultural inputs have gone very high. Due to this, producers will also expect a reasonably high price for their sugarcane. If the production expense is not matched, they’d be discouraged to cultivate sugarcane in the future. These factors also clearly indicate that next year there will again be surplus sugar to the tune of 3.0 million tons approximately. These statistics for the current year as well as the next year regarding projected sugar production necessitate that the Government of Pakistan may immediately allow the export of surplus sugar in phases to facilitate the sugar industry for liquidating their sugar stocks and also handling the next year’s expected surplus stocks, well before time.
Having a surplus of any commodity is not always a good sign for any country. The surplus shows that the production yield has not been utilised and traded judiciously. The surplus sugar stocks will invariably create financial crises for sugar mills as well as the sugarcane growers. This will ultimately drive the government to import sugar and spend the foreign exchange and due to this, the public will have to buy sugar at a higher rate. Pakistan Sugar Mills Association (PSMA) has time and again reminded the government that it is crucial for Pakistan to export the surplus sugar and regulate the prices domestically.