Sugar millers demand full deregulation and export clearance

The Pakistan Sugar Mills Association has urged the government to fully deregulate the sugar sector and allow immediate export of the remaining 800,000 tonnes of surplus sugar.

In a statement reported by Business Recorder, the association's general body said farmers would be the main beneficiaries of a move to free-market principles because they would get better access to international market-linked prices for sugarcane. It warned that if the existing regulatory framework remained in place, growers could gradually shift away from sugarcane, forcing Pakistan to spend foreign exchange on sugar imports.

The PSMA said several sugar mills were currently closed. Deregulation, it argued, would allow mills to import raw sugar when needed and process locally produced cane according to market conditions.

The association welcomed the government's decision to allow export of 200,000 tonnes of surplus sugar but said it should be followed immediately by permission to export the remaining stocks of 800,000 tonnes.

A PSMA spokesman said the industry had been asking the government since February 2026 to allow export of surplus sugar produced at the end of the 2025-26 crushing season. Through meetings, letters and press releases, the industry said it had informed the government that the country was holding around 1.25 million tonnes of surplus sugar and proposed exporting one million tonnes.

The spokesman said that would protect farmers' interests and earn foreign exchange. With the new crushing season less than two months away, any delay in clearing the surplus could create serious difficulties for mills and growers.

The PSMA said mills were paying extra costs to carry surplus stocks, including bank mark-up. Production costs had also risen because of higher sugarcane prices, taxes, wages and imported chemicals, while domestic sugar prices remained below production costs. That financial pressure could affect mills' ability to offer competitive cane prices and could delay the start of the new season.

The association said large quantities of sugar were still in warehouses, and mills already facing financial constraints could face an acute shortage of working capital needed for crushing.

It added that the upcoming sugarcane crop was estimated to produce another 1.5 million tonnes of surplus sugar. Together with the existing 1.25 million tonnes, that could create serious storage constraints. Low exports and the cost of carrying old stocks could make it extremely difficult for mills to keep crushing operations continuous during the season beginning in November 2026, the PSMA warned.