After last month’s revelation that the country’s leaders had flip-flopped on the sugar policy, suspicions quickly arose that the market was being manipulated by the so-called ‘sugar cartel’ once again. The Sugar Advisory Board had to approve the import of 500,000 tonnes of sugar, just months after allowing almost 750,000 tonnes in exports from June 2024 to January 2025. The move came after the sugar exports reportedly helped fuel a sharp increase in sugar prices. At the time of the export decision, the official domestic market price was reportedly Rs143 per kg, but it has since surged to Rs173 per kg. Did the so-called sugar cartel anticipate this and that they would be able to profit tremendously from the ensuing chaos? We will likely never be able to confirm the former but the latter is a matter of fact. On Tuesday (July 29), a list of sugar mills that exported sugar between July 2024 and June 2025 was presented in the Public Accounts Committee (PAC), revealing that 67 mills exported over 746,469 tons of sugar worth more than $400.02 million (Rs111.97 billion). The committee was also informed that recent fluctuations in sugar prices led to massive profits for mill owners, with the auditor general of Pakistan’s (AGP) report estimating that sugar mills earned approximately Rs300 billion in windfall gains.
When commodity scandals like this take place, the sitting government is usually accused of complicity and this time is no different. That being said, the PM does seem to be working hard to dispel such doubts, issuing a warning on Wednesday (July 31) that any violation of the agreed sugar prices would lead to severe action, as no one would be allowed to exploit the public economically. The ex-mill price of sugar is reportedly set at Rs165 per kg, while the retail price must not exceed Rs173 per kg. Sadly, these official rates have largely been ignored nationwide, with wholesale prices reportedly ranging between Rs174 and Rs178 per kg, while retail rates hover between Rs180 and Rs190 per kg. Some reports also say that the government is planning to deregulate the sugar industry in order to lift production, with the minister for food security and research, who also heads the Sugar Advisory Board, saying the government plans to lift a ban on new sugar mill licenses. However, none of these moves will cover for the fact that Pakistan’s politicians have fallen into this same food import-export trap far too many times for the current government to basically make the same mistake.
While it is good to see the government taking steps to bring more accountability to the sugar sector, one must ask why this did not happen earlier. After all, the problems we are seeing right now are ones that have surfaced before. One must also ask why the government is making food import and export decisions in the first place? Many experts would argue that it is not good for the economy for a state to play this role. Even if we set this viewpoint aside, any state that does make such decisions must have a good handle on what the production, cost and revenue figures in the relevant sector are in order to make accurate decisions. Given the struggles Pakistan’s policymakers are having and have always had with actually documenting economic activity, it would likely be best to refrain from making any direct decision about how much of anything ought to be exported or imported.