Pakistan Sugar Mills Association demands full deregulation of industry
The Pakistan Sugar Mills Association (PSMA) has urged the federal government to fully deregulate the sugar industry, following provincial deregulation of sugarcane pricing. Citing success in rice and maize sectors, PSMA says deregulation would boost innovation, exports, and ethanol production. It welcomed the government’s formation of a committee and called for a long-term sugar sector policy.
The Pakistan Sugar Mills Association (PSMA) has called on the federal government to fully deregulate the sugar industry, arguing that the sector could contribute significantly more to the national economy if allowed to function under free-market conditions.
In a statement issued after a general body meeting, a PSMA spokesperson said that while provinces have already deregulated sugarcane pricing, the federal government should now deregulate the sugar industry itself.
The association said this move would bring the sugar sector in line with other agro-based sectors such as rice and maize, which are already deregulated.
According to the PSMA, the sugar industry is the country’s second-largest agro-based sector after textiles, generating business activity worth Rs1,000 billion annually during the crushing season. It contributes approximately Rs225 billion in taxes and saves the economy around $4 billion through import substitution.
The association also highlighted the industry’s use of bagasse—a sugarcane by-product—for power generation, with surplus energy fed into the national grid. It added that with the right policy environment, a value chain using sugarcane by-products could be developed, including ethanol production for fuel blending.
Pakistan introduced an Ethanol Blending Policy in 2009, which was later discontinued. The PSMA stated that current bio-ethanol production could replace 7% of national gasoline consumption and reduce reliance on imported petroleum products. It urged the revival of this policy.
The PSMA also pointed out that deregulated sectors like rice and maize have achieved better outcomes, including $5 billion in annual rice exports. These sectors, operating without import-export restrictions, benefit from international market pricing and greater investment in crop research, resulting in better yields.
In contrast, the sugar sector has seen limited progress in developing improved sugarcane varieties, and regulation has hindered innovation and productivity.
The PSMA reiterated its stance during the Sugar Advisory Board meeting held on July 17, 2025. It welcomed the federal government’s decision to form a committee on sugar sector deregulation and expressed hope that a long-term policy would be introduced to allow the industry to expand its contribution to business activity, employment, tax revenue, and foreign exchange earnings.
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Source : Profit Pakistan Today
