Govt to deregulate sugar industry under IMF plan

The federal government of Pakistan has decided to end its intervention in the sugar sector as part of the conditions agreed upon with the International Monetary Fund (IMF).

The government is planning to fully exit sugar market control, except for keeping a strategic stock of 500000 tonnes, equal to one month’s national need. The Trading Corporation of Pakistan (TCP) will manage this reserve stock. According to official sources, the final draft of the deregulation plan is being prepared in consultation with sugar industry stakeholders. The goal is to stabilize prices, increase production, and support exports.

Under this proposal, the private sector will manage all sugar trade, pricing, and supply operations. The government will no longer intervene in routine sugar market matters. To protect poor families from possible price increases, the government may expand the Benazir Income Support Programme (BISP) if needed. This safety net would support low-income consumers in case prices become unstable after deregulation.

The draft plan also suggests that sugar exports during surplus seasons will help farmers earn better returns for their sugarcane crops. Allowing exports can balance supply and demand while benefiting both growers and the economy. Another key proposal is to raise sugar mill operations from the current 50% to 70% of capacity. This step could boost sugar production by an extra 2.5 million tonnes. If exported, the surplus sugar could earn up to $1.5 billion annually in foreign exchange.

Sources added that only the strategic buffer will be kept under government control. All other sugar activities, including buying, selling, and supply chains, will be handled by private companies. The plan is expected to be presented to the Prime Minister soon for final approval.