Pakistan has approved the export of 250,000 tons of sugar from stocks currently available in the domestic market, raising concerns about pressure on local supplies and prices.
The decision was taken by a committee headed by Deputy Prime Minister Ishaq Dar. The proposal will now be submitted to the Economic Coordination Committee (ECC) and the federal cabinet for final approval.
The sugar for export will be purchased from the domestic market and will not be taken from stocks held by the Trading Corporation of Pakistan (TCP).
The approval comes ahead of the new sugarcane crushing season, scheduled to start on November 15. Exporting a large quantity of sugar before the arrival of the new crop could create a supply gap and push domestic prices higher.
Research estimates that every Rs. 1 increase in sugar prices can raise the value of sugar mills’ stocks by around Rs. 5 billion to Rs. 6 billion.
Sugar prices also rose sharply after exports were permitted last year. Prices were around Rs. 140 per kg when exports were allowed but later climbed to nearly Rs. 220 per kg.
