Pakistan unveils new sugar policy to end price controls, boost competition 

PAKISTAN – The Government of Pakistan has finalised a new national sugar policy aimed at reducing long-standing controls over pricing, production, and trade, in a move designed to improve efficiency and encourage competition across the sector. 

The draft policy aligns with reform commitments under the International Monetary Fund (IMF) programme, including the removal of both formal and informal price controls throughout the sugar value chain.  

Officials said the measures are intended to create a more market-driven system while ensuring fair returns for farmers and millers. 

“Proposed changes are designed to improve market efficiency, encourage competition and ensure fair returns for both farmers and millers, while protecting consumer interests,” officials said. 

A key component of the policy is the elimination of the zoning system, which previously restricted where farmers could sell their sugarcane and limited the establishment of new mills.  

Authorities believe removing these restrictions will allow farmers to access better prices and promote a more open and competitive market. 

Under the new framework, farmers will be free to sell their produce to buyers of their choice, while mills will gain greater flexibility in sourcing raw materials. The reforms are also expected to support diversification and improve profitability across the industry. 

The policy places significant emphasis on farmer welfare, introducing measures such as third-party weighing systems, improved access to credit, and support for mechanisation. These initiatives are aimed at enhancing transparency, ensuring timely payments, and increasing farm incomes. 

In addition, the government plans to promote ethanol blending, maintain buffer stocks, and strengthen regulatory oversight to prevent unfair practices. These steps are expected to encourage innovation and improve supply stability in the domestic market. 

To ensure a smooth transition, officials have proposed a phased approach to trade liberalisation. A clearer mechanism for sugar exports will be introduced this year, with full liberalisation expected by November 2026, subject to outcomes. 

“Domestic consumption needs will be assessed annually, and production figures will be verified through a tracking system at the end of each crushing season,” officials said. 

Pakistan, the world’s seventh-largest producer of refined sugar, operates around 79 sugar mills and produces over 6 million tonnes annually. The sector, valued at approximately Rs1.1 trillion, plays a critical role in supporting smallholder farmers. 

The policy also seeks to amend existing laws that allowed authorities to fix sugarcane prices and assign farmers to specific mills, giving growers greater autonomy and reducing reliance on controlled pricing systems. 

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