LAHORE: While Pakistan Sugar Mills Association (Punjab Zone) appreciates governmental actions taken to curb smuggling and hoarding of sugar, it has warned against restricted inland movement of the commodity, which is hurting the market and millers.

In a statement, the PSMA said it had repeatedly requested in different high-level meetings with officials to take anti-smuggling measures, which eventually brought down artificial price hike and ensured preservation of sugar stocks for domestic needs.

Now, the sugar millers representative body again places some newly emerging issues relating to sugar sector in public domain for appropriate decisions of the government.

As per latest data of FBR, 1.13 million tonnes stocks as on Oct 31, 2023 are still available with sugar mills which will last for more than two months, considering our average off-take of last 11 months.

The start of new crushing season [with this stocks position] has put the industry into a precarious situation. The storage capacity of many sugar mills is already occupied due to the existing stocks.

Continuation of stringent administrative measures to restrict inter-provincial movement of the sweetener are not only disrupting supply chain but also causing shortages and price disparities in sugar-deficient provinces. Non-clearance of previous liability of banks due to un-disposed sugar stocks with high interest rates has added to cash flow crunch of sugar mills notwithstanding that banks have squeezed credit lines for growers’ payments after court decision.

Prices of sugar are already much lower than its higher cost of production due to increases in major cost components like prices of sugarcane, interest rates and imported chemicals.

The PSMA requests the government to save the industry by purchasing surplus stocks through Trading Corporation of Pakistan (TCP) to be kept as strategic reserves, a practice which was previously done regularly by successive governments, to safeguard consumers interests and release whenever there is a price hike or the government may allow the industry to export second tranche of 250,000 tonnes of surplus stock, as was agreed by the last government, after considering its necessity and merits, which will not only earn a sizable foreign exchange for the country, keeping in view high international prices of sugar but will also smoothen farmers payments in next crushing season.

Published in Dawn, November 16th, 2023