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March 22, 2019

Pakistan’s Commerce Ministry Seeking Permission For 0.6 MMT Sugar Export

Pakistan’s Commerce Ministry is seeking permission to export another 0.6 million tons of surplus sugar, taking the total to over a million ton in 2017, after expectations of another bumper crop in 2017/2018 marketing year.

Pakistan in the current crop year allowed 0.425 million metric tons for exports, and 0.348 MMT of sweetener has already been exported. The Sugar Advisory Board that met on June 20 sought permission for further exports from the surplus stock.

Abundant supplies has helped stabilized the prices during the fasting month of Ramadan, when prices usually peak on demand. The Committee has decided that after the export of 0.45 MMT tons out of the proposed 0.6 MMT sugar, it will review the domestic price stability before moving forward with the rest of the stock

Sugar prices as of June 15 were at 56.30 rupees per kg, 11 percent less from the level of December 15, 2016.

Sugar production in South Asia’s second biggest economy is projected at a record 6.0 MMT for 2017/18 as official support price encouraged farmers to grow more.  High tariff on sugar import also contributed to higher stocks.

Pakistan in recent years has offered exports subsidies but interest is currently low due to relatively favorable domestic market which, despite lower prices, still offers incentives.

Sugarcane is grown on approximately 1.25 million hectares and provides the raw material for 84 sugar mills. The sugar industry is the Pakistan’s second largest agriculture-based industry after textiles.

Pakistan’s marketing year (MY Oct/Sep) 2017/18 sugarcane production is forecast at a record 72 million metric tons (MMT), marginally up from the revised 2016/17 estimate which is based on preliminary official data.

Planting for the crop that will be harvested in the fall of 2017 is complete and area has increased by 2 percent as compared to last year. Lower market prices of competing crops such as cotton and rice led to an increase in sugarcane area as farmers sought income predictability via the provincial procurement prices.

Since 2011/12, sugarcane and sugar has benefited from generous support prices and high tariffs. According to preliminary official estimates, the MY 2016/17 sugarcane production is estimated at a record 71.5 million tons, up 9 percent from the previous year.

 

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