Sugar glut threatens crushing season, warns PSMA

LAHORE, September 17th, 2026 - The Pakistan Sugar Mills Association (PSMA) has warned that a sugar surplus could disrupt the 2026-27 crushing season unless the government permits exports of at least one million tonnes of the commodity. PSMA Chairman Zaka Ashraf addressed the issue at a press conference, stating that mills could pay international prices to cane growers if the sector were fully deregulated.

Ashraf proposed that mills could share revenue from sugar exports with growers under complete deregulation. He also cautioned that mills may delay the crushing season if the government does not allow exports of the surplus stock. The PSMA reported that the country produced approximately 7.7 million tonnes of sugar during the 2025-26 crushing season, with an additional carryover stock of 271,000 tonnes, totaling nearly 8 million tonnes.

With domestic consumption estimated at around 560,000 tonnes per month, the association projects a surplus of about 1.25 million tonnes by November 15. The government has only permitted exports of 308,000 tonnes so far, which the PSMA deems insufficient. Ashraf urged the government to allow exports of at least one million tonnes to dispose of surplus stocks, protect the sugar industry, and generate foreign exchange.

He emphasized that the sugar industry is Pakistan's second-largest agro-based sector after textiles and generates over Rs1 trillion in annual direct and indirect business activity. The industry currently faces heavy regulation, with 70% of sugar used by commercial and industrial consumers deregulated, while domestic consumption remains under government controls.

The PSMA argued that sugar prices should be deregulated like sugarcane prices and that both imports and exports should be allowed. Ashraf stated that the industry could produce up to 15 million tonnes annually without additional investment and could potentially export 8 million tonnes, generating around $4 billion annually. He identified potential markets for Pakistani white sugar in Central Asian states, Afghanistan, and China, citing the country's geographical proximity as an advantage.

The PSMA also highlighted the industry's use of bagasse for energy and the surplus electricity generated that could be supplied to other industrial users.