Amid growing public frustration over rising sugar prices, Minister for Food Security and Research, Rana Tanveer Hussain, announced that the government has decided to move forward with deregulating the sugar industry and lifting a long-standing ban on new sugar mill licences.
While talking to a private news channel, the food minister, who also leads the Sugar Advisory Board, acknowledged short-term supply disruptions but dismissed widespread shortages, stating that prices in parts of Islamabad had already stabilised at Rs172-173 per kilogram. However, in remote areas, prices have still reached Rs195.
He attributed the initial price hikes to a few mills temporarily halting their supplies and retailers hoarding stock at inflated prices before the government-negotiated agreements on supply were implemented. The government expects the market to fully stabilize by the end of this week.
Responding to a question about last year’s decision to allow sugar exports despite promises from mills to keep domestic prices below Rs144 per kilogram, the minister defended the policy by explaining that a surplus of 7.6 million tons was created due to the production of 6.8 million tons and carryover stock.
He noted that the surplus prompted exports, but production dropped this year to 5.8 million tons due to adverse climate effects, forcing the government to halt sugar exports in January 2025.
Regarding criticism that sugar millers are making excessive profits at the expense of consumers, the minister announced that Prime Minister Shehbaz Sharif had formed a high-level committee, led by Power Minister Sardar Awais Leghari, to propose a deregulation plan within 30 days. The goal is to foster competition and increase production from 5.8 million tons to 10 million tons, allowing Pakistan to export surplus sugar without impacting domestic prices. The government also plans to lift the long-standing ban on new sugar mill licences.
The minister argued that deregulation would benefit sugarcane growers, who saw the price of sugarcane nearly double last season, from Rs350 to Rs700 per 40 kg.
When questioned about ongoing protections for mill owners, the minister responded that while millers are driven by profits, the government’s focus remains on ensuring sugarcane production and avoiding sugar imports.
