Sugar millers make out case for exports

Attention: open in a new window. PDFPrintE-mail

KARACHI: The country will have around one million tonnes of extra sugar this year based on monthly consumption of around 390,000 tonnes and available stocks of 3.45 million tonnes held by sugar mills of three provinces till May 15, 2014, according to millers’ estimates.

They said mills in Punjab hold 1.927m tonnes of sugar stocks, followed by 1.328m tonnes in Sindh and 200,000 tonnes in Khyber Pakhtunkhwa.

“If we use 390,000 tonnes of sugar per month, our consumption comes to 2.34m tonnes from May 15 to November 2014 which means we will still have around 1m tonnes of surplus stocks,” Javed Kayani, a former chairman of the Pakistan Sugar Mills Association (PSMA), told Dawn from Lahore.


One million tonnes of surplus sugar likely this year


He said sugar production from November 2013 to April 2014 stood at 5.45m tonnes, of which Punjab produced 3.25m tonnes, Sindh 1.850m tonnes and Khyber Pakhtunkhwa 350,000 tonnes.

However, despite all indicators regarding sugar production and stocks situation are satisfactory, Mr Kayani was unsatisfied with slow pace of sugar exports.

According to figures of Pakistan Bureau of Statistics (PBS), sugar exports plunged by 27 per cent in quantity and 37pc in value.

In the first 10 months (July-April) of this fiscal year, exports stood at 564,960 tonnes ($248m) compared to 778,775 tonnes ($393m) in same period last fiscal. This export data also included export shipment of over 60,000 tonnes made in July-September 2013-2014.

When the government had announced export permission of 500,000 tonnes of sugar on Sept 7, 2013, 400,000 tonnes were exported to various foreign destinations on the same terms and conditions as of last year.

However, in March this year, the government further allowed export of 250,000 tonnes but took away all the benefits like withdrawing SRO 77, inland freight subsidy while exports were further hit by rupee’s appreciation against the dollar.

He said that by June 15 only 50,000-60,000 tonnes of export out of 250,000 tonnes would be made as per contracts with foreign buyers.

Mr Kayani said that India having good crop is providing freight subsidy of $54 per tonne besides a subsidy of 66-billion Indian rupees to growers.

Millers, he said, had cleared payment of Rs220bn to growers and only Rs15-20bn was pending.

He said the government should restore the previous incentives and benefits so that Pakistan could fetch more revenues through sugar exports. “There will be no sugar crisis after calculating consumption and available exportable surplus,” he added.

Around 70pc of sugar out of country’s total production is consumed in juices, squashes, syrups, soft drinks, biscuits and confectionery, while the share of households and other customers is just 25-30pc.

According to data of large-scale manufacturing, the country’s soft drinks production rose to 1.75bn litres in 2012-13 compared to 1.6bn litres in 2011-12. A total of 238m litres of juices, syrups and squashes were produced in 2012-13 compared to 214m litres in 2011-12.

In July-March 2013-14, soft drinks production rose to 1.542bn litres from 1.151bn litres in the same period last fiscal. Production of juices, syrups and squashes jumped to 178m litres in the nine-month period from 157m litres from a year earlier.

Pakistan also imported sugar in July-April period of this fiscal year: some 9,352 tonnes worth $5m landed here compared to 5,737 tonnes worth $4m in the year-ago period.

“This imported sugar is being brought by some pharmaceutical companies otherwise there is no need for imports when the country has good production and stocks,” Mr Kayani, the former PSMA chairman, said.

Published in Dawn, June 1st, 2014


Forex open Market rates & comments Archive

Login Form