PSMA says mills face cash shortage to pay farmers as surplus sugar remains unsold

The Pakistan Sugar Mills Association (PSMA) has warned that mills face an acute cash crunch, with one million tonnes of surplus sugar still unsold. A spokesperson said the government had confirmed the surplus stocks in several meetings but has yet to decide on the export request from the industry. The association said holding the extra stock adds costs, including bank mark-ups, which further strain its finances.

On Monday, the Trading Corporation of Pakistan invited international bids to sell 107,739 tonnes of refined white sugar abroad from stock imported last year. The Economic Coordination Committee had cleared the export on August 20, and the tender follows that approval. According to the PSMA, only two months remain before the sugarcane harvest and the new crushing season begins, while mills lack cash for farmer payments, machinery repairs and wages.

The industry forecasts new-crop output of 8 million tonnes, yet warehouses already holding 1 million tonnes of surplus would make accommodating it hard. The association said production costs have multiplied because of higher cane prices, taxes, wages and imported chemicals, leaving sugar prices well below cost. With international market conditions favourable, the PSMA has urged the government to approve exports now, estimated at $700 million to $800 million in revenue.