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LAHORE: Warning of an impending liquidity crisis caused by a staggering 1.197 million-tonne sugar surplus ahead of the upcoming sugarcane harvest, the Pakistan Sugar Mills Association (PSMA) has issued an urgent third letter to National Food Security and Research Minister Rana Tanveer Hussain, demanding immediate government authorisation to export excess sugar before the new crushing season begins.
According to figures reconciled and agreed upon by the Federal Board of Revenue (FBR) and the sugar industry, national sugar inventories stood at 3.171m tonnes as of July 31. With national monthly consumption averaging 564,196m tonnes, the country is projected to hold nearly 1.2m tonnes of excess stock when the 2026-27 crushing season officially commences on Nov 15.
The gluts are expected to expand even further as agricultural forecasts point toward another bumper sugarcane crop, which is projected to yield an additional 8m tonnes of sugar, far above local consumption needs.
The PSMA stressed that the industry is trapped in a severe financial bottleneck. Market selling prices have plunged below actual production costs, even as input costs and sugarcane procurement prices continue to climb. With vast quantities of unsold stock tied up in mill warehouses, manufacturers are facing acute cash-flow shortages that threaten their ability to repay bank loans and settle outstanding payments to sugarcane farmers.
