Export of Sugar

Sugar: Pakistan’s Second Agro Industry

Sugarcane, and significant cash crop, is full-grown on more than a million hectares and provides the raw material for Pakistan’s 78 sugar mills – comprising the country’s second largest agro industry. Sugarcane production is recurring as farmers and industries continue to work at odds. Industry procurement practices, such as delaying the crushing season, buying cane at less than the support price, short weight, false deductions and delayed payments, reduce returns to farmers. Sugar millers complain that farmers plant unapproved varieties with low sucrose content, thus resulting in lower sugar production.

Sugar Industry Linking Domestic Prices with growing World Prices

According to market sources, as the international sugar price approaches $400 per ton, Pakistan’s sugar industry has increased the retail sugar price from Rs 25.5 per kg to Rs 35 per kg over the past several months. According to official sources, the Pakistan Sugar Mills Association (PSMA) has proposed that the GOP stabilize sugar prices at Rs 35 per kg, which they consider the threshold level. Sources note that the sugar industry expects Pakistan’s next sugar cane crop to decline by 10 percent.

Sufficient Sugar Stocks Available

Sugar stocks at present are reportedly around 1.8 million tons, sufficient to meet domestic requirements up to November 2008 -- the start of the next crushing season. However, the PSMA predicts that price pressure will continue beyond November due to the reduced area currently under agriculture.