Prime Minister Shehbaz Sharif has granted full authority to the Federal Board of Revenue (FBR), Federal Investigation Agency (FIA), and Intelligence Bureau (IB) to take action against those in the sugar industry who have amassed an estimated Rs140 billion in unjustified profits, according to a news report.Â
As part of a two-phase strategy, government officials and intelligence personnel have been stationed at sugar mills to monitor financial activities and gather evidence of malpractice.
Authorities have compiled crucial data on transactions, stockpiling, and market manipulation that has plagued the sector for years. During the ongoing crackdown, the government has identified key players involved in hoarding, artificial price inflation, and the creation of fake and benami accounts used for financial transactions. Based on this evidence, authorities are preparing to file criminal cases under anti-money laundering laws, tax evasion statutes, and anti-hoarding regulations.
According to reports, the prime minister is personally overseeing the campaign, emphasizing that no entity—regardless of political connections—will be exempt from accountability.
In the second phase, if market forces remain unresponsive, the government may directly target sugar mill owners who have facilitated price manipulation by concealing stocks and conducting transactions through fraudulent accounts.
The impact of the crackdown has already been reflected in sugar prices. Before the action began on March 13, sugar was being sold at Rs175-185 per kilogram in Lahore and surrounding areas. By March 16, the price had dropped to Rs165 per kg.
Furthermore, the Ministry of Production has also summoned sugar mill owners and major dealers to Islamabad today [Monday] for discussions on the recent spike in sugar prices during Ramazan despite an earlier agreement with the Sugar Mills Association that rates would remain stable in exchange for export approval.
Sugar prices had been steadily rising for months. On November 22, 2024, at the start of the crushing season, the national average price was Rs137 per kg.
By March 14, 2025, prices had climbed to Rs173 per kg, with prices in major cities such as Lahore, Karachi, Faisalabad, Peshawar, and Quetta reaching as high as Rs180-185 per kg.
Speculators were predicting further increases, with some expecting rates to hit Rs200 per kg in the coming months and Rs220 by the end of the season in November 2025.
Amid this inflationary trend, investors and dealers heavily purchased sugar stocks, anticipating significant profits. Government officials suspect that sugar millers, wholesalers, and distributors colluded to manipulate prices. Estimates suggest that after factoring in ex-mill rates and sales tax, sugar prices should be around Rs140-145 per kg, with a maximum market price of Rs155-160 per kg.
The FIA, IB, and FBR have conducted raids and gathered substantial evidence linking stockists, wholesalers, and distributors to price-fixing and market manipulation. With the prime minister’s approval, the crackdown is set to continue, ensuring market stability and preventing artificial inflation in the sugar sector.
