Lahore: Adam Sugar Mills Ltd. has released its unaudited financial statements for the six months ending March 31, 2025, revealing a decrease in sugar production compared to the previous year. The decline in output comes amidst the deregulation of sugar cane prices by the Government of Punjab, aligning with the International Monetary Fund's guidelines to allow market forces to determine prices.
The company reported that it crushed 651,341 metric tons of sugarcane during the current season, down from 684,186 metric tons in the same period last year. The sugar recovery rate also fell from 10.13% to 8.82%, resulting in a production of 57,442 metric tons of sugar, a decrease from the 69,369 metric tons produced in March 2024. Despite the extended crushing season, which lasted 115 days compared to last year's 104 days, the lower yield and recovery rates affected overall production.
According to information available from the Pakistan Stock Exchange (PSX), the deregulation of sugar cane prices is part of broader economic reforms aimed at fostering market-driven price mechanisms. While the deregulation is expected to stabilize prices in the long term, the immediate impact on production has been noticeable across sugarcane-growing regions in Pakistan.
The financial report also highlighted that the country's sugar production is sufficient to meet local demand, mitigating concerns about potential shortages. Despite the production decline, there is no expectation of a major surplus as witnessed in the previous financial year.
In terms of credit standing, VIS Credit Rating Company Limited reaffirmed the company's long-term and short-term credit ratings at A- and A2, respectively, following the third annual review in May 2025. The company's outlook remains optimistic, contingent upon favorable government policies and timely economic decisions.
The recent decision by the State Bank of Pakistan to cut the policy rate by 100 basis points to 11.00% on May 5, 2025, was welcomed by the industry. Adam Sugar Mills Ltd. stated that further rate rationalization is necessary to maintain regional competitiveness and reduce business costs.
The board of directors expressed gratitude to the company's workforce, bankers, and shareholders for their continued support and confidence in the management.