Pakistan plans sweeping deregulation of sugar industry, ending subsidies, price controls, and trade restrictions as part of IMF-backed reforms.
In a major policy shift linked to reforms under Pakistan’s agreement with the International Monetary Fund (IMF), the government has decided to fully exit the sugar sector, transferring control to market forces and ending decades of state intervention.
Following the deregulation of wheat, the government is now preparing to deregulate the sugar industry. A comprehensive reform plan, prepared by a government committee and obtained by Samaa TV, outlines wide-ranging changes aimed at abolishing subsidies, price controls, and trade restrictions.
Farmers to Gain Full Freedom
Under the proposed plan, farmers will have complete freedom to cultivate sugarcane without restrictions on varieties or cultivation zones. Growers will be free to sell sugarcane to any sugar mill of their choice or use it for producing jaggery, with no government interference.
End to Sugarcane Price Controls
The government will no longer fix sugarcane prices, as the minimum support price mechanism will be abolished. Instead, prices will be determined by market demand and supply, marking a significant shift in agricultural pricing policy.
Subsidies, Quotas, and Trade Bans to End
The proposed reforms state that the government will end all subsidies on sugar exports and remove existing export quotas imposed on sugar mills. Longstanding bans on sugar imports and exports will also be lifted, allowing free trade in the commodity.
New Sugar Mills and Imports Allowed
The government plans to lift the ban on setting up new sugar mills across the country. Mills that have remained closed for up to eight months will be allowed to import raw materials, while all mills will have the freedom to process locally grown sugarcane or imported raw sugar.
Under the deregulation framework, sugar mills will also be permitted to import raw sugar, refine it locally, and re-export it, a move expected to improve capacity utilisation and boost exports.
Safeguards for Farmers
To protect farmers from potential losses, the committee has proposed issuing a list of prohibited sugarcane varieties before each sowing season. This measure aims to discourage cultivation of low-yield or unsuitable varieties while maintaining market freedom.
Officials say the reforms are designed to reduce fiscal pressure, promote competition, and align Pakistan’s agricultural policies with international reform commitments. If approved, the changes will fundamentally reshape Pakistan’s sugar industry.
