EVERY few years, Pakistan’s sugar industry makes the same demand: the country has a surplus, warehouses are full and exports must be allowed immediately. And every few years, the country ends up asking the same question: if there was so much surplus, why did sugar become scarce and expensive at home? Pakistan is at that crossroads again. The Pakistan Sugar Mills Association (PSMA) wants permission to export one million tonnes, claiming a surplus of 1.03 million tonnes (mt) and another bumper crushing season from November. Exports, it says, are needed to clear warehouses, generate liquidity and buy the next cane crop, and could earn around $600 million. The question is deceptively simple: does Pakistan genuinely have a surplus? The answer depends on who is asked and on whether anyone outside the industry has counted the bags.
Ghosts of inquiries past The government was initially reluctant. A committee reviewing the request reportedly deferred a decision, fearing a repeat of the previous year, when exports were followed by a price surge that took retail sugar beyond Rs180 per kg; the Ministry of Commerce told parliament no export proposal was under consideration.
Last year the government allowed the export ofsome 0.75mt after concluding stocks were sufficient, earning roughly $402 million, and insisted a reserve of 0.5mt had been retained. Within months its pricing agreement with millers collapsed: the announced ex-mill rate of Rs159 per kg and retail ceiling of Rs164 did not hold. By mid-2025 it was approving imports to stabilise supplies, eventually bringing in about 300,000 tonnes at a cost of some $150 million.
In August this year, the Economic Coordination Committee considered exporting 108,000 tonnes lying with the Trading Corporation of Pakistan what remains of that import but decided to call international tenders. The contradiction is hard to miss: the state is weighing the export of sugar it imported during a shortage while refusing to accept the industry’s claim of a large exportable surplus.
The millers’arithmetic PSMA President Zaka Ashraf says stocks are already monitored through the Federal Board of Revenue system and every bag accounted for, making physical verification unnecessary. Yet the association’s figures have moved: 3.4mt of stocks on July 15 with a projected surplus of 1.158mt, then 3.171mt on July 31 with a surplus of 1.197mt by Nov 15. If the position is electronically reconciled with the FBR, why do the estimates shift? Millers say blocked inventories have created a liquidity crisis, leaving them struggling to repay loans, buy cane and settle growers’ dues.
Ashraf puts production cost at around Rs160 per kg, expects some eight million tonnes from the coming season, and argues exports would not move prices because fresh supply arrives from November. Most controversially, he says outstanding payments to farmers can be settled as export proceeds flow which raises a question of its own: should growers’ dues depend on export permission? Farmers divided Pakistan Kissan Ittehad president Khalid Mahmood Khokhar wants one million tonnes exported before crushing starts on Nov 15, warning that failure to clear the surplus could collapse cane prices and cost farmers as much as Rs100 billion a repeat, in his telling, of 2017-18.
His fear is the mirror image of the consumer’s: not empty shelves, but full warehouses leaving mills with neither space nor money for a crop spread over 3.5m acres.
The PTI Kisan Wing disagrees. Its general secretary, Ejaz Shafi, says growers in Rahim Yar Khan received Rs300 to Rs350 per 40kg, but opposes exports, arguing the 2021 and 2025 episodes were both followed by shortages and price shocks. Cane is perishable and costly to move, leaving farmers dependent on nearby mills. ‘Export windfalls,’ the wing argues, ‘predominantly benefit mill owners rather than automatically translating into higher cane prices.’ Shafi wants a forensic audit of stocks and mill finances before any export permission.
With cane production at a record 89.45mt in 2025-26, a genuine surplus would be a real problem for mills and growers alike. But the sector’s record explains the suspicion. The Sugar Inquiry Commission report of 2020 found more than four million tonnes exported over five years and over Rs29bn paid to millers in export subsidies public money underwriting exports while consumers paid more at home. It estimated windfall profits above Rs100bn, documented under-reporting and supply manipulation, and noted how few groups control production, across the political divide. In 2021, the Competition Commission imposed Rs44bn in penalties on mills and the PSMA, challenged since in court.
Whose numbers can we trust? The dispute turns on the credibility of the surplus, not on whether exports are good or bad. Sugar rotting in warehouses, or prices so depressed that mills cannot buy the next crop, is wasteful. A miscalculated surplus is worse: it manufactures a shortage and forces the state to import at a higher price.
The burden of proof must therefore sit with the industry. Before permission is granted, the government should publish independent verification of mill-wise stocks, confirm payments to growers, calculate consumption until the next season and fix a strategic reserve with a retail price threshold at which exports halt automatically. Last year showed that announcements alone cannot hold a price.
A detailed version of this article can be accessed on Dawn.com.