Pakistan to fully deregulate sugar sector, in line with IMF recommendations

In a major policy shift, Pakistan has decided to fully deregulate the sugar sector, in line with the implementation of structural reforms recommended by the International Monetary Fund (IMF), following the earlier deregulation of the wheat sector, Business Recorder reported. 

The deregulation will hand control of the sugar industry to market forces, ending decades of state intervention. Under the new policy, farmers will be free to cultivate any variety of sugarcane in any zone and will have the option to sell their crops to any sugar mill or even produce jaggery without government restrictions.

The government will also discontinue regulating sugarcane prices, eliminating the minimum support price mechanism. Prices will instead be determined by supply and demand in the market. 

Additionally, subsidies on sugar exports will be removed, along with the current export quotas imposed on sugar mills. The longstanding ban on sugar imports and exports will also be lifted, allowing free trade in the commodity.

The plan also includes provisions to increase industry capacity, such as lifting the ban on establishing new sugar mills and allowing closed mills to import raw materials. Sugar mills will be permitted to process both locally grown sugarcane and imported raw sugar, and will be able to import raw sugar, refine it locally, and re-export the refined product. These changes aim to increase capacity utilization and boost refined sugar exports.

To ensure that the reforms do not negatively impact farmers, the government will issue a list of prohibited sugarcane varieties before each sowing season to prevent the cultivation of low-yield or suboptimal varieties. This measure is intended to protect farmers while promoting market freedom.