Islamabad, Mar 7, 2025: The Punjab chapter of the Pakistan Sugar Mills Association (PSMA) has categorically denied allegations that the recent surge in sugar price is linked to sugar exports.
In an official statement, a PSMA spokesperson dismissed these claims as misleading, stating that the price increase has been wrongly associated with exports without acknowledging the actual reasons behind it.
According to the spokesperson, the sugar sector has been grappling with severe financial constraints due to prolonged delays in receiving export approvals.
By the close of September 2024, the industry had amassed an excess stock of nearly 1.5 million metric tons of sugar, with an estimated value of Rs. 250 billion.
This surplus had been used as collateral against bank loans, bearing an interest rate close to 25%, resulting from two consecutive years of overproduction. 
Pakistan Secures Rs. 1.25 Trillion Loan to Ease Circular Debt
The representative further pointed out that sugar has a limited shelf life of just two years, after which it is deemed unfit for human consumption.
The spokesperson emphasized that an agreement reached with the government during the initial export approval phase ensured that ex-mill sugar prices would not surpass Rs. 140 per kilogram throughout the export period.
However, despite the substantial stockpile, ex-mill prices remained significantly lower than the agreed-upon threshold for several months.
The industry suffered considerable financial losses as more than 50% of the available sugar was sold below production costs.
Additionally, the spokesperson underscored the difficulties faced during the ongoing sugarcane crushing season, citing a drop in sucrose levels and a lower overall crop yield.
These challenges stemmed from pest infestations, unfavorable weather patterns, and the broader consequences of climate change.
Moreover, the cost of sugarcane has escalated sharply, with farmers receiving Rs. 650 per maund, thereby increasing production expenses for sugar mills.
