ISLAMABAD: The government’s contradictory sugar policies have plunged the domestic market into chaos, with prices skyrocketing to Rs190/kg after authorities first approved massive exports and then scrambled to arrange emergency imports of 750,000 metric tonnes.
This policy U-turn has exposed critical flaws in Pakistan’s agricultural decision-making process, benefiting millers while burdening consumers with record-high prices during an already difficult economic period.
Export Spree Precedes Shortage
Pakistan exported 765,734 metric tonnes of sugar worth Rs114 billion between July 2024 and May 2025 – a shocking 2,200% increase over the previous year.
This export bonanza occurred despite warnings from experts about potential domestic shortages and price hikes that would hurt ordinary consumers.
The Pakistan Sugar Mills Association (PSMA) had assured the government of sufficient stocks, but within months of the export approvals, retail prices surged by Rs50 per kilogram.
Deputy Prime Minister Ishaq Dar now chairs crisis meetings to arrange imports of 250,000 tonnes of raw sugar and 500,000 tonnes of refined sugar – nearly matching the exported quantity.
Policy Confusion Raises Eyebrows
The sudden reversal has sparked serious questions about the government’s decision-making process and its relationship with powerful sugar mill owners.
In March, authorities fixed sugar prices at Rs164/kg after negotiations with PSMA – a body previously accused of cartel-like behavior by the Competition Commission of Pakistan.
Despite these controls, the government failed to prevent prices from climbing to Rs190/kg, suggesting either poor enforcement or deliberate loopholes for millers.
Economic experts point to broader policy inconsistencies, noting this episode follows Dar’s unilateral reduction of solar panel taxes from 18% to 10% without proper process.
The sugar crisis highlights Pakistan’s struggle to balance free market policies with necessary interventions to protect consumers from price gouging.
Sugar, Inflation, Policy
The PSMA claims current stocks can last until November, making the massive import plan difficult to justify through simple supply-demand calculations.
Millers have suggested solutions like curbing smuggling and adjusting crushing seasons, but these measures appear insufficient to explain the dramatic policy reversal.
Opposition lawmakers have accused the government of favoring industrialists with political connections at the expense of both farmers and consumers.
“Export and import decisions should be market-driven, not manipulated by politically-connected millers,” said PTI MNA Usama Mela during recent finance committee proceedings.
As the cabinet prepares to formally approve the import policy, questions remain about who will ultimately bear the cost – both financially and politically – for this mismanagement.
With food inflation already running at 16%, the sugar crisis threatens to further erode public trust in the government’s economic stewardship during challenging times.
The episode also raises concerns about transparency in decision-making, as key economic policies increasingly originate from Dar’s committee rather than formal institutional forums.
Consumer rights groups demand a thorough investigation into whether millers artificially created shortages to justify both export permissions and subsequent import needs.
As Pakistan navigates this self-inflicted crisis, the sugar saga serves as a cautionary tale about the dangers of short-sighted policymaking and regulatory capture by powerful industries.
