Govt authorizes import of 750,000 metric tonnes of sugar after record exports, fueling price hikes

• Pakistan’s sugar export rises 2,200% to 765,734 metric tonnes in 11 months, earning Rs114 billion 

In a surprising move, the federal government has authorised the import of 750,000 metric tonnes of sugar after exporting nearly the same amount during the current fiscal year, The Express Tribune reported.  

Though the Ministry of National Food Security has argued that there are sufficient stocks of sugar in the country, imports are being pursued to stabilise prices. However, this decision has sparked concerns over the rising sugar prices in the local market. 

The approval came after a series of discussions led by Deputy Prime Minister Ishaq Dar, who announced that the government would submit a policy for importing 250,000 metric tonnes of raw sugar and 500,000 metric tonnes of refined sugar to the cabinet for final approval.

The move to both export and then import sugar has raised questions regarding the government’s handling of the sugar sector. In the first 11 months of the fiscal year, Pakistan exported 765,734 metric tonnes of sugar, earning Rs114 billion. This represents an increase of 2,200% compared to the same period last year. 

The policy to export first and import later has led to a sharp rise in domestic sugar prices, which have hit a record Rs190 per kilogram, up from Rs140 before the exports. 

The government had previously set the retail price of sugar at Rs164 per kilogram in March, 13% higher than the price when the export approval was first given, leading to significant gains for sugar millers.

Dar emphasised that the government remains committed to balancing the interests of both consumers and producers. He added that the Ministry of National Food Security has been tasked with seeking approval from the Economic Coordination Committee (ECC) for the sugar imports.

The move has raised concerns from opposition members and experts, who have questioned why the government allowed sugar exports when it could have jeopardised domestic supply. 

Meanwhile, the Pakistan Sugar Mills Association (PSMA), a direct beneficiary of the export decision, has recommended measures to curb sugar smuggling and suggested a tolling policy to manage the shortage of raw sugar. They also proposed starting the crushing season earlier to help meet demand, though the proposal is seen as symbolic.