Govt, sugar mills agree on cost audit, temporary price cut

ISLAMABAD: The federal government and sugar millers on Wednesday agreed to appoint an independent third-party firm to audit sugar production costs — while millers also committed to temporarily reducing ex-mill prices to offer immediate relief to consumers until Eidul Azha.

This step of independent cost audit is aimed at ensuring transparency in the determination of production expenses and price setting, thereby creating a fair and data-driven pricing framework for the future. The agreement was reached during a follow-up meeting chaired by Federal Minister for National Food Security and Research, Rana Tanveer Hussain, amid growing concerns over pricing disputes and public outcry over rising costs of essential commodities.

Hussain welcomed the sugar mills’ decision to temporarily lower ex-mill sugar prices until Eidul Azha, calling it a positive step to provide immediate relief to consumers. He said the move reflected the industry’s willingness to cooperate with the government for market stability and public welfare. A new pricing formula, based on the audit findings and mutual consultation, will be finalised after Eid, he said.

The minister reaffirmed the government’s focus on curbing artificial inflation, strengthening regulatory oversight, and encouraging public-private coordination to protect consumers. Ensuring food security and fair pricing requires trust, data-driven policies and continued dialogue, he added.

The ministry pledged to maintain active engagement with all market players to promote responsible practices and protect public interest in the run-up to Eid and beyond.

As of now, the ex-mill price stands at Rs159 per kg, while the retail rate in the open market has shot past Rs180 per kg. The Pakistan Bureau of Statistics (PBS) puts the average retail price at Rs175/kg — far above the government’s officially fixed price of Rs164/kg, notified on March 19.

The current pricing dispute traces back to the government’s decision to allow the export of over 700,000 metric tonnes of sugar last year, when it had set the retail price at Rs144/kg. A 10-member committee, led by Deputy Prime Minister Ishaq Dar, later on March 19, approved the current ex-mill price of Rs159/kg, up from Rs141.14/kg.

Official sources told The News that millers are now pressing for another hike to Rs164/kg, while the government is inclined to raise it modestly to Rs160/kg — pending the outcome of the cost audit.