In a move that has sparked widespread criticism, the government has decided to import 750,000 metric tonnes of sugar—ironically, just months after it allowed nearly the same quantity to be exported. The decision, announced by Deputy Prime Minister Ishaq Dar, comes at a time when domestic sugar prices have surged to Rs190 per kilogram, inflicting economic strain on consumers while appearing to benefit powerful sugar millers.
The plan includes 250,000 metric tonnes of raw sugar, pending cabinet approval, and 500,000 metric tonnes of refined sugar, already cleared in principle. The announcement followed Dar’s second high-level meeting on the matter in just three days and has raised serious concerns over the coherence and intent of the government’s sugar trade policy.
A Pricey Paradox
Between July and May of this fiscal year, Pakistan exported over 765,000 metric tonnes of sugar, generating Rs114 billion in export revenue—a staggering 2,200% increase over the previous year. Yet, this export surge has left the local market undersupplied, sending retail prices soaring by over Rs50 per kilogram. The sudden pivot from export to import has left critics questioning whether the government’s policy serves the broader public or a narrow industrial lobby.
The Ministry of National Food Security insists the country has sufficient sugar stocks and claims the import move is aimed at stabilising prices. Yet, the decision suggests either a significant underestimation of actual consumption or a deeper-than-admitted supply shortfall.
Windfalls for Millers, Burdens for Consumers
Critics argue the government’s earlier decision to allow exports—followed by its current plan to import sugar—has delivered windfall profits to sugar millers. In March, the government even revised the fixed retail sugar price to Rs164/kg, a 13% increase from the level set during the export approval phase. While the Pakistan Sugar Mills Association (PSMA) negotiated these prices with Dar’s committee, enforcement failed, and prices continued to climb.
PSMA, often criticised for cartel-like behaviour, claims the country produced 5.9 million tonnes of sugar this year, nearly 1 million tonnes less than the previous season. Despite asserting that current stocks are enough to meet demand through November, the association has backed the government’s decision to import, likely to curb smuggling and deflect public criticism.
Political and Economic Fallout
Observers have labelled the export-then-import strategy as a policy contradiction that benefits a select group of politically connected industrialists. Usama Mela, a PTI lawmaker, denounced the move in a parliamentary committee, stating that such decisions should be left to market forces and farmers, not politically influential millers.
The situation also reflects a broader inconsistency with the government’s claimed embrace of free-market agricultural policies, as direct state intervention in sugar trade persists.
Broader Policy Measures
The sugar import decision follows other recent economic moves by Dar’s office, including a downward revision of the proposed sales tax on solar panel imports (from 18% to 10%)—a domain traditionally handled by the Ministry of Finance. Meanwhile, Finance Minister Muhammad Aurangzeb is currently preoccupied with trade talks in the U.S., leaving key domestic decisions increasingly centralised under Dar.
At the meeting, PSMA also proposed a tolling model for raw sugar imports, a November 1 start for the crushing season, and stronger anti-smuggling measures. The association claimed that the cost of importing sugar without duties stands at Rs153/kg, still Rs37 lower than current domestic prices—indicating just how steep local markups have become.
Final Word
The government’s contradictory handling of sugar policy—exporting for profit, importing to suppress backlash—has eroded public trust and put the spotlight on vested interests. While the stated goal is to make sugar affordable and widely available, the outcome so far has been soaring prices, opaque policymaking, and windfall gains for millers. If left unchecked, this cycle may further undermine credibility in economic governance and deepen the burden on the average Pakistani consumer.
