ISLAMABAD: After weeks of steep increases in sugar prices across the country, the federal government has reached an agreement with the sugar industry, setting the ex-mill price of sugar at Rs165 per kilogram, the Ministry of National Food Security and Research announced on Monday.
According to a brief statement issued by the ministry, all provincial governments have been directed to ensure the availability of sugar at affordable rates in light of this decision.
This development comes shortly after the federal cabinet approved the import of 500,000 metric tonnes of sugar to stabilise domestic prices and avoid a supply crisis. “The committee approved the import of up to half a million tonnes of sugar to maintain stable prices nationwide,” read a statement posted on X by the government last week.
Earlier this year in March, Deputy Prime Minister Ishaq Dar warned sugar mill owners against price manipulation after retail prices surged unexpectedly. He said that retail prices should not exceed Rs164 per kilogram, referring to reports of sugar being sold at Rs178-179 per kg, a situation he described as “unacceptable to the prime minister.”
Despite official price caps, sugar continues to be sold at arbitrary rates in markets. In Lahore, for instance, consumers report prices ranging from Rs190 to Rs210 per kg, with no availability at the government-fixed rate of Rs180.
In Karachi, the Wholesale Grocers Association Chairman, Rauf Ibrahim, said that sugar mills in Sindh and Punjab suspended their supply to markets last Friday, creating an artificial shortage. “For the past four days, only stored sugar has been sold in Karachi, which has pushed wholesale prices from Rs178-180 to Rs182 per kg, and retail prices from Rs190-195 to Rs200 per kg,” he said.
Ibrahim criticised the government for failing to take action against mill owners and hoarders, warning that such negligence is allowing price manipulation to thrive.
Sources say the core issue is collusion among powerful sugar mill owners, who have historically pressured governments to permit exports under the pretext of surplus stocks, which in turn drives up domestic prices. Between 2015 and 2020, Pakistan officially exported 2.355 million metric tonnes of sugar to Afghanistan, but Afghan data shows only 1.5 million tonnes were received. The remaining 778,000 tonnes were allegedly smuggled, with no record found for this volume.
Documents also reveal that in past years, 26 sugar mills received billions in subsidies to export 400,000 tonnes of sugar, extracting Rs4.12 billion in subsidies up until 2021. Earlier this year, after exporting 750,000 tonnes, domestic sugar prices surged from Rs140 to Rs170 per kg, prompting the government to increase the ex-mill price by Rs20. However, this led to retail prices crossing Rs200 per kg in local markets, forcing the government to consider imports once again.
Under current IMF conditions post-2021, the government is barred from providing subsidies on sugar exports or fixing minimum prices for sugarcane, as the IMF demands complete deregulation of the sugar sector.
