LAHORE: The country could earn nearly $500 million in much-needed foreign exchange by immediately allowing the export of “surplus” sugar stocks, the Pakistan Sugar Mills Association (PSMA) claimed on Sunday.

It warned that mounting inventories are creating a “severe financial strain” on both sugar mills and growers.

In a letter addressed to Deputy Prime Minister Ishaq Dar, PSMA Chairman Chaudhry Zaka Ashraf requested the government to convene an early meeting of the cabinet committee formed to examine the industry’s demand for sugar exports and allow representatives of the association to present their case.

According to the letter, the sugar industry produced a substantial surplus during the 2025-26 crushing season. Total domestic sugar stocks have reached 7.9 million metric tonnes (MMT) against the country’s annual consumption requirement of approximately 6.6 MMT, including projected population growth. This has created a surplus of around 1.3 MMT. Even after maintaining a one-month strategic reserve, surplus stocks would still stand at about 0.76 MMT.

The association argued that exporting this excess sugar would not only generate around $500 million in foreign exchange but also help ease pressure on the country’s current account deficit.

The PSMA thanked the federal cabinet for constituting a committee under the chairmanship of the deputy prime minister to review the export request.

However, it stressed that a prompt decision was needed as surplus inventories were creating serious cash-flow problems for mills.

The association said sugar prices remained below production costs despite rising expenses for key inputs, resulting in significant losses for the industry. Large unsold stocks have reduced the sector’s ability to meet bank loan obligations and settle outstanding payments to sugarcane farmers.

The letter noted that improved payments to farmers over the past two years had encouraged investment in better crop varieties and farm inputs, leading to higher yields and improved sugar recovery rates. As a result, another record sugarcane crop is expected in the coming season, potentially creating an additional sugar surplus of nearly two million metric tonnes valued between $1.5 billion and $2 billion.

The PSMA warned that unless timely policy measures are adopted, the current cycle of improved farmer returns could reverse, as financially-stressed mills may be unable to offer attractive prices for sugarcane in future seasons.

Citing rapidly changing geopolitical conditions, the association urged the government to hold the cabinet committee meeting at the earliest and allow a PSMA delegation to participate in discussions to explain the industry’s concerns and recommendations.

LOCAL PRICE: On a number of occasions in the past the PSMA had failed to honour its commitment to maintain sugar price if it was allowed to export surplus stocks.

Published in Dawn, June 1st, 2026