Govt slashes sugar import amid IMF concerns, industry pressure

ISLAMABAD: In a sharp reversal of policy, Pakistan’s state-run Trading Corporation (TCP) on Monday slashed its sugar import tender from 300,000 metric tons to just 50,000 MT and delayed the bid opening date to July 22, 2025 — signaling mounting pressure from domestic millers and rising concerns from the International Monetary Fund (IMF) over policy violations tied to the country’s $7 billion loan program.

The TCP’s move, announced via an official corrigendum, comes after the federal government reached a behind-the-scenes deal with Pakistan’s powerful sugar millers — many of whom are in parliament — agreeing to raise the ex-mill sugar price from Rs159 to Rs165 per kilogram. That Rs6/kg hike effectively granted the industry billions in fresh profits, even as retail prices remain stuck near Rs200/kg, well above the government’s earlier price cap of Rs164/kg announced in March by Deputy Prime Minister Ishaq Dar.

The rollback in imports marks a significant U-turn from Islamabad’s earlier commitment to bring in half a million tons of tax-free sugar to tackle record-high prices and public outrage over inflation. But the IMF has sharply criticized the decision to waive nearly all import duties without consultation, branding it a direct violation of Pakistan’s written commitments under the Extended Fund Facility (EFF).

According to officials, the IMF dismissed Pakistan’s justification of a national “food emergency” and warned that the tax-free import policy — executed without prior approval from the lender —breached two core conditions of the bailout. The Finance Ministry had earlier cautioned that the move could put the entire loan program at risk, already strained by repeated policy reversals.

Insiders at the Ministry for National Food Security told The News that lobbying by sugar millers intensified immediately after the import plan was announced. “They activated their political links, pushed back hard, and ultimately got what they wanted—a rollback of large-scale imports and a sweet Rs6/kg bonus,” a senior official said.

Sugar remains a politically explosive commodity in Pakistan, where over 80 percent of sugar mill ownership is linked to lawmakers. Despite repeated attempts to regulate prices, enforcement has been weak. Market rates have defied official caps, leaving consumers to pay nearly 20 percent more than the announced government ceiling.