PSMA Demands Free Sugar Market, Seeks Export of Remaining 800,000 Tons
Sugar industry seeks export of remaining 800,000 tons of surplus stocks
ISLAMABAD: (News Pulse) The Pakistan Sugar Mills Association (PSMA) has called for the complete deregulation of the sugar sector following the government’s decision to allow the export of 200,000 tons of surplus sugar, saying the move should be followed by the export of the remaining stocks and a shift toward free-market principles.
In a statement, the PSMA General Body said the time had come to fully deregulate the sugar industry, a demand it said was also being raised by farmers’ organizations across the country.
The association said the sugar industry had been urging the government since February 2026 to allow the immediate export of surplus sugar produced at the end of the 2025-26 crushing season.
According to the PSMA, Pakistan currently has a surplus of around 1.25 million tons of sugar in stocks. The association said the export of one million tons could help safeguard farmers’ interests while generating much-needed foreign exchange for the country.
The PSMA welcomed the government’s decision to permit the export of 200,000 tons and expressed hope that authorities would soon allow the export of the remaining 800,000 tons.
The association warned that delays in clearing surplus stocks could create serious financial and operational problems for sugar mills as the new crushing season approaches.
It said mills were already bearing substantial additional costs to maintain surplus inventories, including interest and mark-up payments on bank loans. At the same time, production costs have increased significantly due to higher sugarcane prices, taxes, wages and expenses on imported chemicals and other inputs.
The PSMA maintained that sugar prices remained below production costs, putting severe pressure on the financial position of sugar mills and potentially affecting their ability to offer competitive prices to growers and begin the next crushing season on time.
With less than two months remaining before the start of the new crushing season, the association said large quantities of unsold sugar in warehouses were creating a serious liquidity problem for mills.
The PSMA said estimates for the upcoming sugarcane crop suggested that Pakistan could produce an additional 1.5 million tons of sugar. Combined with the existing surplus of around 1.25 million tons, the projected production could create severe storage constraints unless significant quantities of sugar are exported.
The association warned that low exports and the high financial cost of maintaining carryover stocks could make it difficult for mills to maintain uninterrupted crushing operations during the new season, which is expected to begin in November 2026.
The sugar industry has long advocated deregulation of the sector, arguing that sugar should be traded according to market forces rather than being subject to extensive government controls.
According to the PSMA, a fully deregulated market would primarily benefit farmers by enabling growers to receive prices linked to international market conditions.
The association warned that failure to reform the sector could discourage farmers from continuing sugarcane cultivation, potentially increasing Pakistan’s dependence on imported sugar to meet domestic demand and putting additional pressure on foreign exchange reserves.
The PSMA also pointed out that several sugar mills are currently non-operational and argued that deregulation could enable such mills to import raw sugar when necessary and resume production through both imported raw material and locally produced sugarcane.
The association reiterated its demand for the complete deregulation of the sugar sector, saying a free-market framework was necessary to address surplus stocks, improve the financial viability of mills, protect farmers’ interests and ensure the continuity of sugar production in the country.