Pakistan's sugar glut exposes policy gaps amid economic strain

Lahore [Pakistan], April 10 : Pakistan's sugar industry has urged the government to allow immediate exports of excess production, warning that mounting stocks are becoming economically unsustainable. The Pakistan Sugar Mills Association (PSMA) believes that exporting surplus sugar could provide much-needed relief to both the industry and the country's dwindling foreign exchange reserves, as reported by The Express Tribune.

According to The Express Tribune, a PSMA representative revealed that by mid-November 2025, leftover inventory from the previous season stood at 271,704 metric tons, including both locally produced and imported sugar.

Production during the ongoing crushing season, which began in November 2025, has already reached 7.573 million metric tons as of March 31, 2026, and is expected to touch 7.6 million tons once all mills conclude operations. In addition, seasonal sugar beet output between April and June is projected to contribute another 86,809 metric tons, pushing total production close to 7.958 million tons. However, consumption levels remain significantly lower. Data indicates that annual sugar consumption is expected to rise modestly to 6.638 million tons, factoring in population growth in the country.

This imbalance has resulted in a projected surplus of 1.32 million metric tons. Even after setting aside a strategic reserve equivalent to one month's consumption, an excess of approximately 767,000 tons remains. Industry stakeholders argue that holding such large stocks is financially burdensome, especially as domestic sugar prices have dropped below production costs due to rising sugarcane prices and input expenses, as highlighted by The Express Tribune.

The situation is further aggravated by Pakistan's growing import bill, particularly for oil, amid escalating global prices linked to geopolitical tensions. The PSMA estimates that exporting the surplus sugar could generate between $400 million and $500 million in foreign exchange, as reported by The Express Tribune.

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