The Sugar Advisory Board (SAB) has recommended the government to allow additional export of 0.5 million tons of sugar and the proposal will be tabled before the Economic Coordination Committee (ECC) for formal approval.
Earlier, the ECC green-lighted export of 0.1 million tons of the sweetener. Minister for Industries and Production Rana Tanveer Hussain told a SAB meeting that sugarcane crushing season would start before November 21 and all mills were bound to pay dues of growers. The Industries and Production Division briefed the ECC earlier that it had moved a summary for export of an additional 0.1 million metric tons of sugar on August 21.
The cabinet considered the summary and deferred the ratification of ECC’s decision. It directed that the case should be re-submitted to the ECC while taking into account all relevant factors, including retail prices, available stocks and the domestic sugar requirement until the start of new crushing season.
In that regard, a meeting of SAB was held on September 2, 2024. During the huddle, the Federal Board of Revenue, Pakistan Sugar Mills Association and provincial cane commissioners confirmed that there were sugar stocks of 2.773 million tons as of August 15, 2024 and total consumption over the last eight and a half months of 2023-24 crushing season stood at 4.797 million tons.
They agreed that consumption in the next one and a half months before the commencement of new crushing season would follow the same pattern as in the previous eight months, estimated at 1.974 million tons. Therefore, after considering the quantity of 0.055 million tons, which was planned to be exported, and the potential export of 0.040 million tons to Tajikistan, the surplus sugar to be carried over to next year would be 0.704 million tons. Punjab cane commissioner mentioned that sugar stocks in the province as of August 31, 2024 were 1.570 million tons as offtake in August was lower compared to the previous month.
As the remaining three-month consumption is estimated at 0.375 million tons per month, including domestic needs and exports, 1.125 million tons will be required until November 30, 2024. The surplus, after accounting for one-month strategic reserves of 0.375 million tons, will be 0.072 million tons – sufficient to help meet Punjab’s expected export quota of 0.10 million tons.
SAB also reviewed latest ex-mill, wholesale and retail prices of sugar. It was found that retail prices exceeded the benchmark of Rs145.15 per kg, set by the ECC, by Rs0.73, Rs2.03 and Rs2.56 on July 11, 18 and 25, respectively. However, since then prices have come down. Retail prices were reported at Rs143.79/kg and Rs143.09/kg on August 22 and 29, respectively, which were lower than the benchmark price.
Moreover, ex-mill prices during the same time period stood well below the benchmark of Rs140/kg and were reported at Rs131.5/kg on August 30. Recently, the retail price, as per the weekly Sensitive Price Indicator dated September 12, 2024, was Rs142.28/kg, also lower than the benchmark price. Furthermore, ex-mill prices during the same time frame remained well below the benchmark at Rs130.4/kg on September 13.
