- Pakistan’s sugar production could hit a five-year high in 2021/22.
- Farmers have planted more cane with record returns up for grabs.
- Pakistan’s sugar exports could reach their highest level in three years.
Sugar Production to Hit Five-Year High?
- Pakistan could produce 6.5m tonnes of sugar in 2021/22, up from 4.8m tonnes just two seasons ago.
- This is 1.1m tonnes more than consumption.
- Farmers have planted more cane as the minimum support price has reached a record high.
- And in most cases last season, farmers were paid well above this minimum price.
- The Government has also toughened the sanctions placed on mills that are slow to pay cane farmers.
- Mill owners could now face fines, or even imprisonment, and the Government could take control of their assets.
- With this, farmers seem more comfortable at the idea of planting cane.
Pakistan’s Sugar Exports to Hit Three-Year High?
- As Pakistan will produce more sugar than it needs for consumption there will be excess sugar stocks.
- We think they could export as much as 1.5m tonnes of sugar next season.
- We know Pakistan’s logistical system can handle this volume as 1.64m tonnes was exported in 2017/18.
- This means Pakistan will once again be a large exporter of white sugar, rather than an importer of spot white sugar.
- In 2021, the Government removed import duties for up to 500k tonnes of white sugar to keep domestic prices under control.
- At the time, there were concerns the 2020/21 cane crop would be worse than expected and stocks would be tight.
- The Government also accused sugar mills of stockpiling sugar to keep sugar prices high.
Other Opinions You Might Be Interested In…
Explainers You Might Be Interested In…
