Pakistan : Federal govt pushes sugar reforms as crushing begins in Punjab
Sugar mills in Punjab have started crushing after government pressure, though 15 mills obtained an LHC stay order halting action. Meanwhile, the federal government plans full sugar-sector deregulation, removing mill restrictions and quotas. Industry leaders support the move, expecting higher competitiveness and better farmer prices, though growers may face initial adaptation challenges.
LAHORE: Sugar mills have begun responding to mounting pressure from the provincial government to initiate the sugarcane crushing season, even as the federal government advances its plans to fully deregulate the sugar sector.
The Punjab government has taken a firm stance against mills that disregarded its directive to begin crushing operations by November 15, with 27 out of 41 mills resuming work as of Sunday, according to the special assistant to the chief minister on price control and commodity management. The action is part of coordinated efforts aimed at stabilizing sugar prices and ensuring adequate market supply.
However, the government’s push encountered a legal obstacle after the Lahore High Court (LHC) issued a stay order barring coercive action against certain mills until Monday (today), the date of the next hearing. Fifteen mills, all members of the Pakistan Sugar Mills Association (PSMA), have filed petitions challenging the provincial order—resulting in a temporary shield for those who secured court protection.
A senior PSMA leader said that the government’s measures largely target mills that did not approach the court, while the rest remain safeguarded by the stay order. “The government is selectively taking action, but we are hopeful for a fair hearing,” the leader said, adding that the association believes the directive fails to take into account the industry’s operational constraints.
In a parallel development—one that sharply contrasts with Punjab’s regulatory measures—the federal government has decided to move towards complete deregulation of the sugar sector, with key recommendations expected to be presented to Prime Minister Shehbaz Sharif within the next few days. A special committee headed by Federal Minister Owais Leghari has finalized proposals that aim to liberalize the sector.
According to the Ministry of Food Security, the federal plan includes removing restrictions on establishing new sugar mills and abolishing the import and export quota system. Under the proposed framework, sugar prices would be determined by market forces as well as import and export trends, representing a marked shift from current controls.
This initiative is intended to enhance the sector’s competitiveness, though stakeholders have yet to issue formal responses. The government’s next steps will depend on the prime minister’s approval of the recommendations.
Zaka Ashraf, a central PSMA leader, called the development extremely positive, asserting that it would not only help the industry survive but also benefit farmers, who would receive international prices for their sugarcane due to the export of surplus sugar.
A veteran sugar mill owner confirmed the progression of the plan, noting that several high-level meetings had taken place over the last six months on issues critical to the sector. He expressed optimism about the results of deliberations.
Another sugar mill CEO said he hoped the reforms would move forward, describing deregulation as a long-standing industry demand. He also emphasized the need to abolish the Sugar Factories Control Act of 1950.
A sugar dealer with an agricultural background added that deregulation could initially pose challenges for growers who have yet to adopt modern techniques needed to improve per-acre yields. However, he noted that once farmers begin embracing such methods, the sector could experience significant gains i.e. lower cane costs, higher yields, improved recovery rates, and reduced production expenses. Ultimately, he said, this would lower sugar prices, enhance global competitiveness, increase farmer incomes and attract greater private investment in agricultural research — driving innovation and long-term sectoral growth.
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Source : The News International
