Pakistan issues tender to export 107,739 tons sugar, traders say

Pakistan's sugar industry is in a perpetual tug-of-war over whether the country truly possesses a surplus that warrants export, or if the declared surplus is merely a construct to justify the sale of domestic sugar stocks. This debate is ignited every few years as the industry declares a surplus and seeks permission to export, only for the domestic market to subsequently experience shortages and price hikes.

Recently, the Pakistan Sugar Mills Association (PSMA) has requested export permission for 1 million tonnes of sugar, based on an alleged surplus of 1.03 million tonnes. However, the veracity of these claims is called into question, as there is skepticism about whether the government and industry have accurately counted the sugar bags in warehouses.

The government's hesitation stems from the previous year's experience, when exports led to a sharp increase in domestic sugar prices. The ministry has explicitly stated it is not considering any proposal to export surplus sugar, citing lessons learned from the previous cycle. This year, the government has entertained the idea of exporting 108,000 tonnes of sugar held by the Trading Corporation of Pakistan, rather than granting private mills the opportunity.

Despite this, the PSMA maintains that all sugar stocks are accurately monitored, and another physical verification is unnecessary. The industry argues that clearing warehouses is crucial before the November crushing season begins. However, their own statements on stock levels have shifted since July, leading to questions about the reliability of these figures.

The state's position is further complicated by the fact that it is contemplating exporting sugar it imported during a previous shortage, while simultaneously declining to fully accept the industry's claim of a substantial exportable surplus. This contradiction has sparked a critical examination of the government's approach to balancing the interests of sugar producers and consumers.