ISLAMABAD — The government’s decision to import 500,000 metric tons of sugar—split between the Trading Corporation of Pakistan (TCP) and private sector—is expected to add $275–280 million to the import bill but is unlikely to bring down local prices, industry sources said. Retail prices are expected to stabilise near current levels of Rs195–200 per kg, with the landed cost of imported sugar projected around Rs155 per kg.
The move follows extensive tax exemptions granted by the Federal Board of Revenue (FBR), including zero customs duty, 0.25% sales and withholding tax, and waiver of the 3% minimum VAT. These waivers, designed to ease the import cost, have sparked concerns over fiscal discipline amid Pakistan’s IMF programme.
Sources told Business Recorder the Finance Division had opposed subsidies or tax relief, but Deputy Prime Minister Ishaq Dar overruled objections and secured cabinet approval via summary circulation—bypassing the Economic Coordination Committee (ECC).
Meanwhile, the Competition Commission of Pakistan (CCP) raised red flags over policy inconsistency. It noted that the government had allowed the export of 500,000 tons of “surplus” sugar just months earlier in October 2024—leading to shortages and price hikes. The CCP had previously warned against such cycles driven by industry lobbying, pointing to past Sugar Advisory Board (SAB) meetings where the Pakistan Sugar Mills Association (PSMA) pushed for exports even amid sufficient domestic supply.
Retail prices have since surged to nearly Rs200 per kg, prompting criticism that exports triggered artificial shortages, and imports are now being used to correct the same policy misstep—at significant public cost.
Former PSMA chairman Iskander Khan denied industry involvement in the import decision and said mills have sufficient stock—about 0.5 million tons—to meet demand until the next crushing season.
The CCP also reiterated long-standing concerns over lack of pricing transparency and absence of independent data verification. It warned that policy decisions based on industry-supplied data risk enabling cartel-like practices and repeating fiscal missteps.
Critics argue that the sugar import move reflects a familiar pattern: profits privatised during exports, losses socialised through taxpayer-funded imports, with little benefit to the consumer.
