The government has decided to allow the export of an additional 200,000 metric tonnes of sugar, citing sufficient domestic stocks and improved production. The decision was taken by a sugar steering committee chaired by Deputy Prime Minister Ishaq Dar and will now be presented to the Economic Coordination Committee (ECC) for formal approval.
The latest decision comes less than a month after the ECC approved the export of 108,000 tonnes of imported sugar on August 19. Federal Minister for National Food Security Rana Tanveer Hussain said Pakistan would still have more than 600,000 tonnes of surplus sugar after meeting domestic requirements until the next crushing season.
According to Dar’s office, the deputy prime minister was satisfied with the current availability of sugar stocks. Officials maintained that existing reserves, combined with expected production, would be sufficient to meet domestic demand until the next crushing season.
The government has also decided to introduce a monitoring mechanism to prevent the additional exports from triggering a significant increase in local sugar prices. Officials have stressed the importance of closely monitoring the market and taking timely action to protect food security and ensure essential commodities remain available at affordable prices.
However, the decision has raised concerns because Pakistan has previously experienced sharp increases in sugar prices following large-scale exports. Last year, the government allowed the export of 790,000 tonnes of sugar before later permitting imports of 500,000 tonnes. Only around 300,000 tonnes were ultimately imported.
The National Food Security Ministry later acknowledged that substantial exports, combined with a 15% decline in domestic sugar production, contributed to a sharp rise in prices. Sugar prices eventually reached around Rs220 per kilogram.
The current situation is different, with sugar prices reportedly around 18% lower than a year earlier due to improved production. The commodity is currently selling at an average price of about Rs148 per kilogram. The latest export decision will therefore test whether the government can maintain this price relief while allowing sugar mills to export part of their surplus.
The move has also renewed concerns about governance and regulation in Pakistan’s sugar industry. An IMF Governance and Corruption Diagnostic Assessment highlighted concerns over the relationship between powerful economic interests and state regulators in the sector. The report noted that sugar producers had benefited from government policies, subsidies and regulatory arrangements.
The IMF also raised concerns about the influence of politically connected mill owners on sugarcane prices, tariffs, exports and other policy decisions. Previous large-scale sugar exports were cited as contributing to domestic shortages and price increases.
The Federal Investigation Agency has also investigated allegations involving artificial shortages, speculative hoarding and manipulation of sugar prices. With Pakistan having around 90 licensed sugar mills, some of which are linked to political figures and elected representatives, the latest export decision is expected to face further scrutiny.
The government’s ability to manage domestic stocks, control prices and prevent shortages will remain a key issue as the export plan moves to the ECC for formal approval. The decision is also likely to be closely watched during the IMF’s upcoming engagement with Pakistan, particularly in relation to proposed reforms aimed at improving competition and reducing excessive government involvement in the sugar sector.
