Pakistan moves to meet IMF condition with sugar sector deregulation
Pakistan plans to deregulate its sugar sector by June 2026 to meet IMF conditions, allowing new mills and raw material imports. While reforms aim to boost efficiency, lawmakers warned delayed crushing, weak price protection, and lack of oversight could harm sugarcane farmers and deepen market manipulation.
Islamabad, December 18, 2025 – Pakistan is set to fulfill a key condition of the International Monetary Fund (IMF) by moving ahead with the deregulation of the sugar sector, a reform the government has committed to complete by June 2026.
The federal government has finalized a draft policy for deregulating the sugar industry, under which sugar mills will be allowed to import raw materials, a senior official of the Ministry of National Food Security and Research (MNFS&R) informed a parliamentary panel.
While briefing the National Assembly Standing Committee on National Food Security and Research, the official said the deregulation framework was prepared by a high-level committee constituted by the prime minister. The meeting was chaired by MNA Syed Hussain Tariq.
Under the proposed policy, amendments will be made to sugarcane-related laws, and the long-standing ban on establishing new sugar mills will be lifted. However, the Sugar Advisory Board (SAB) will continue to function to protect the interests of sugarcane growers, the official said. A meeting of the SAB is expected in the coming days to discuss issues related to the ongoing sugarcane crushing season.
Committee chairman Syed Hussain Tariq noted that the current sugarcane price stands at around Rs400 per maund, adding that mills had briefly raised the rate to Rs471 per maund before cutting it once harvesting began. Another MNFS&R official told the committee that sugarcane crushing has started, with 11 million tons crushed so far, producing approximately 900,000 tons of sugar.
Tariq expressed concern that only 12 percent of crushing has taken place so far compared to last year, warning that delayed crushing toward the end of December could severely hurt farmers as sugarcane begins to lose weight in January. He questioned who would compensate growers for such losses and stressed the need for a clear mechanism to regulate sugarcane prices.
The committee emphasized that while IMF conditions must be met, safeguarding the sugarcane sector is equally critical. Members voiced serious concern that the SAB has yet to hold its first meeting despite the crushing season nearing its end. The panel also urged the government to formally announce the crushing season to prevent manipulation and monopolistic practices by sugar mills.
The committee was informed that the minimum support price for sugarcane has not been announced for the past two years due to the IMF’s policy of zero market intervention. MNA Rana Muhammad Hayat Khan accused the sugar industry of exploiting growers and called for strict action, while MNA Zulfiqar Ali Behan suggested allowing farmers to produce raw sugar, alleging the SAB had failed to protect their interests.
During the meeting, the MNFS&R also briefed lawmakers on a sharp decline in rice exports, which have fallen below 30 percent. Officials attributed the drop to India’s re-entry into the global rice market, exporting 45–50 million tons and benefiting from FTA status and a 24 percent subsidy, making Pakistani rice less competitive.
The committee directed the ministry to pursue FTA status on a priority basis to boost rice exports and decided to invite the Ministry of Commerce and the Ministry of Industries to the next meeting to develop a comprehensive strategy.
The meeting was attended by MNAs Abdul Qadir Khan, Syed Javed Ali Shah Jillani, Musarrat Asif Khawaja, Minister for National Food Security and Research Rana Tanveer Hussain, and senior ministry officials.
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Source : PK Revenue
