April 1 (Bloomberg) -- Sugar shipments from Pakistan, Asia’s fourth-largest producer, are set to decline 17 percent this year after record sales a year earlier drained inventories, a millers’ group said.
Exports may drop to 1 million metric tons in the year from October from 1.2 million tons in 2012-2013, said Shunaid Qureshi, chairman of the Pakistan Sugar Mills Association. Traders shipped 500,000 tons by the end of February, he said.
Futures in New York rallied 7.6 percent this year on expectation dry weather from Brazil to Thailand and Australia, the biggest exporters, may reduce a global glut. Prices may not extend gains because of surpluses in countries including India, Brazil and Pakistan, Qureshi said.
“It is imperative for us to get the surplus sugar out of the country to enable us to pay the farmers,” Qureshi said in an interview in Karachi on March 28. “These are not attractive prices and at these prices we are making a loss, but they are better than what we were getting three months ago.”
Futures jumped 14 percent in February, the biggest monthly advance since June 2011. The contract for May delivery declined 0.7 percent to 17.65 cents on ICE Futures U.S. at 4:01 p.m. in Singapore today.
Production may increase 9.6 percent to 5.7 million tons this year, while consumption may total 4.3 million tons to 4.4 million tons, Qureshi said.
Pakistan last week allowed mills to export 250,000 tons of sugar, bringing approvals to 750,000 tons so far this year. The mills plan to approach the government in May or June for permission to ship an additional 250,000 tons, Qureshi said.