Govt eyes sugar industry deregulation, lifts ban on new mill licences

ISLAMABAD: Amid public anger over surging sugar prices, the government has moved toward deregulating the sugar industry and lifting a longstanding ban on licences for new mills, a senior cabinet minister said Tuesday.

In a televised appearance on Geo TV’s Aaj Shahzeb Khanzada Kay Saath, Minister for Food Security and Research Rana Tanveer Hussain, who also heads the Sugar Advisory Board, admitted short-term supply disruptions but dismissed claims of widespread scarcity, saying prices had already stabilized in parts of Islamabad at Rs172-173 per kilogram, although remote areas saw rates as high as Rs195.

He blamed initial disruptions on a handful of mills that temporarily halted supplies and on retailers who stocked up at higher rates before government-brokered supply agreements took effect. The government expects the market to normalize fully this week.

Khanzada asked the minister over last year’s decision to allow sugar exports despite industry pledges not to raise domestic prices beyond Rs144 per kg. “These mills later sold it at Rs200,” the anchor noted. The minister defended the policy, citing the production of 6.8 million tons and after adding carryover stock it reached to 7.6 million tons that created a surplus. “It prompted us to export the surplus. But production dropped to 5.8 million tons this year due to climate impacts, forcing a halt in sugar exports in January 2025,” he added.

Addressing criticism that millers reap windfall profits while consumers bear higher costs, the minister said Prime Minister Shehbaz Sharif has constituted a high-level committee to propose a deregulation plan within 30 days, led by Power Minister Sardar Awais Leghari. “We want competition, efficiency and production to grow from 5.8 million tons to 10 million tons, so Pakistan can export surplus sugar without hurting domestic prices. The government also plans to lift a ban on new sugar mill licenses, pending for years,” he added.

The minister argued that deregulation would also benefit growers, who saw sugarcane prices nearly double from Rs350 to Rs700 per 40 kg last season. Khanzada, however, questioned why government policies continue to shield mill owners.

“Millers are businessmen; they’ll always chase profits. Our job is to ensure farmers grow sugarcane and we don’t end up importing sugar,” the minister replied.