Government initiates sugar imports to steady domestic market prices
In an effort to address the worsening sugar crisis, the federal government of Pakistan has approved the import of 500,000 metric tonnes of sugar. This move aims to stabilize domestic prices and ensure market availability amid rising prices and shortages [1][2][4].
The government has waived import duties, amounting to 53%, to make the procurement cost-effective and immediate. This decision comes after allowing sugar exports when supplies were abundant, but domestic prices later surged to nearly Rs200 per kilogram due to market volatility and shortages [1][2][3].
The imported sugar is expected to increase supply, reduce price speculation, and maintain a balance in the market without burdening the national exchequer through subsidies [2][3][4]. This shift in policy marks a departure from previous strategies that often relied on subsidies and artificial shortages, signaling a more direct government role in managing supply to protect consumer interests and ensure affordability [2][3].
Shipments of imported sugar are scheduled to arrive by early to late September, with government agencies coordinating import tenders and finance support via the central bank [4][5]. The retail price, as per the agreement, must not exceed Rs173 per kilogramme.
Prime Minister Shehbaz Sharif has issued directives for the enforcement of the agreement reached between the Pakistan Sugar Mills Association (PSMA) and the government. He has also warned of strict action against those violating agreed sugar prices, emphasizing no financial exploitation of the public [6].
Federal Minister Rana Tanveer Hussain chaired a meeting with the PSMA and provincial stakeholders, warning of "strict oversight" of mill stocks [7]. The ex-mill price of sugar, as per the agreement, is set at Rs165 per kilogramme [8].
The government has placed 18 sugar barons on the Exit Control List (ECL) [5]. Meanwhile, the PSMA's Punjab and Khyber Pakhtunkhwa chapters have denied any seizure of stocks by the government [9].
Despite these efforts, markets in cities like Karachi, Peshawar, and Quetta have seen prices surge to as high as Rs190 per kilogramme, defying official price caps [10]. Moreover, markets in Lahore and Islamabad are reporting severe shortages [11].
The prime minister has reiterated the government's resolve to continue cracking down on hoarders and market manipulators to prevent artificial price hikes and speculative trading [12]. The government has ordered the import of an additional 200,000 metric tonnes of sugar [13]. The first shipment of imported sugar is expected to arrive in early September.
- In alignment with the government's directives, Prime Minister Shehbaz Sharif has emphasized no financial exploitation of the public, issuing strict action against violators of the agreed sugar prices.
- The imported sugar, scheduled to arrive by early to late September, is anticipated to increase supply, reduce price speculation, and maintain a balance in the market without burdening the national exchequer through subsidies.
- Despite the government's efforts, challenges persist in several major cities, as market prices in Karachi, Peshawar, and Quetta have reached as high as Rs190 per kilogramme, even defying official price caps.
- As the first shipment of imported sugar is expected to arrive in early September, the federal minister, Rana Tanveer Hussain, has led a meeting with the Pakistan Sugar Mills Association (PSMA) and provincial stakeholders, stressing the need for strict oversight of mill stocks.
