Pakistan : Sindh rejects sugar sector deregulation, opposes ending crop zoning, ban on new mills ahead of IMF deadline
Sindh opposed immediate deregulation of Pakistan’s sugar sector, rejecting proposals to remove crop zoning and restrictions on new mills under a proposed IMF-backed national sugar policy. The province demanded phased reforms, stronger provincial control, buffer stocks, import tariffs, and measures.
The Sindh government has opposed immediate deregulation of the sugar sector and rejected proposals to abolish crop zoning and remove restrictions on new sugar mills, complicating the federal government’s commitment to the International Monetary Fund (IMF) to finalise a new national sugar policy by the end of June, The Express Tribune reported.
According to details shared by the provincial cabinet, Sindh has submitted nearly a dozen objections to the draft sugar policy finalised by the federal government in consultation with provinces and stakeholders.
During the recent staff-level talks with the lender, Finance Minister Muhammad Aurangzeb had assured the IMF that the government was moving towards full liberalisation and that the policy would be approved by federal and provincial governments before being adopted by the federal cabinet by the end of June 2026.
The provincial government argued that regulation of the sugar sector falls under provincial jurisdiction and said any federal policy must respect provincial authority over price fixation, licensing, zoning and oversight.
“The provincial government strongly opposes setting up new sugar mills as the existing sugar mills are running much below sanctioned capacity,” the objections stated.
Buland Khan Junejo, spokesperson for the Sindh government on irrigation and agriculture, said Sindh opposed immediate deregulation but could support phased deregulation over five to ten years. He warned that sudden deregulation could expose farmers to exploitation during periods of excess sugarcane supply.
The federal government’s draft policy proposed removing processing-stage restrictions, ending crop zoning controls and lifting restrictions on approvals for new sugar mills and capacity expansion, subject to provincial consensus.
However, Sindh has proposed conditional regulation of refined sugar prices and said export liberalisation should only proceed if buffer stock maintenance and consumer protection mechanisms are introduced.
The province also proposed allowing duty-free imports of raw sugar for processing and re-export as refined white sugar. It further stated that the federal government should bear the cost of maintaining buffer stocks, while decisions on sugar exports should remain with provinces.
Sindh recommended retaining and strengthening the Sugar Factories Control Act instead of abolishing it, calling for improved enforcement and greater transparency with stakeholder participation.
The provincial cabinet also said import regulatory duties and tariffs should remain in place to protect growers from subsidised imports. It further proposed stronger provincial oversight through cane commissioners’ offices and equal cost-sharing with the federal government for research, development and environmental compliance initiatives.
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Source : Profit Pakistan Today
