The cabinet committee has reportedly rejected the Pakistan Sugar Mills Association’s (PSMA) request to allow the export of surplus sugar, citing concerns that exports could lead to higher sugar prices in the domestic market.
According to sources, Deputy Prime Minister Ishaq Dar chaired a meeting of the Cabinet Committee on Friday to review the sugar industry’s request for permission to export surplus sugar stocks.
Sources said the relevant ministries and divisions opposed the proposal, warning that allowing sugar exports could increase local sugar prices.
The concerns come after sugar prices rose above Rs. 180 per kilogram last year following the government’s decision to allow sugar exports, raising fears of a similar situation if exports are approved again.
After reviewing the proposal, the committee reportedly decided not to move forward with the export of surplus sugar.
Earlier, Pakistan Sugar Mills Association (PSMA) Chairman Chaudhry Zaka Ashraf wrote to Deputy Prime Minister Ishaq Dar, urging the government to immediately allow the export of surplus sugar.
In the letter, Ashraf thanked the federal cabinet for forming a committee under the deputy prime minister to examine the industry’s request.
He said the sugar industry produced significantly more sugar than the country’s domestic requirement during the 2025-26 crushing season.
According to the PSMA, total sugar stocks currently stand at 7.9 million metric tonnes (MMT), while annual domestic consumption is estimated at 6.6 MMT, leaving a surplus of 1.3 MMT. The association said that even after maintaining a one-month strategic reserve, around 0.76 MMT of sugar would still be available for export.
The PSMA argued that exporting the surplus could generate nearly $500 million in foreign exchange, providing much-needed support to Pakistan’s external account.
The association said surplus sugar stocks have created severe financial pressure on sugar mills by affecting cash flows and limiting their ability to repay bank loans and clear outstanding payments owed to sugarcane growers.
The PSMA also said that despite increasing production costs, domestic sugar prices remain below the cost of production, resulting in significant financial losses for the industry.
According to the letter, timely payments to farmers over the past two years encouraged greater investment in better-quality seed and farm inputs, leading to improved crop yields and higher sugar recovery.
The association said another bumper sugarcane crop is expected during the upcoming season, which could create an additional surplus of nearly 2 MMT, valued between $1.5 billion and $2 billion.
The PSMA warned that without timely government support, the industry may not be able to offer competitive prices to farmers, which could discourage sugarcane production in future seasons.
The association urged the government to convene the Cabinet Committee meeting as soon as possible, particularly in light of the evolving geopolitical situation. It also requested that a PSMA delegation be invited to present its case before the committee.
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