GREED knows no bounds. But the avarice of those involved in the sugar business — from manufacturers to retailers — in Pakistan is legendary. The powerful sugar cartel is known for using its political clout to extort concessions from every government to make large amounts of money, in times of both shortages and surpluses. Nothing has ever stopped them from profiteering at the expense of unprotected consumers. This is in spite of evidence of the existence of a large grey market and significant tax theft by mill owners and traders. An FIA inquiry against mill owners and wholesale distributors, following the eruption of a sudden sugar crisis during the tenure of Imran Khan, recommended several actions to be implemented across the supply chain to regulate the sugar trade and prevent the recurrence of such events. However, the suggested measures never took off.

Retail sugar prices have again experienced an abnormal, rapid surge from Rs130 per kilogram to Rs180 since January. This is despite the ongoing crushing season and the industry’s commitment to the government not to let retail rates go up beyond Rs140-145 in return for permission to export their excess stocks last year. Instead of holding the manufacturers to their promise, or addressing the underlying structural issues driving the periodic price volatility, the government responded by announcing plans to import raw sugar. The present price hike is not resulting from any shortages in the market. Importing the sweetener and subsidising it at Ramazan bazaars are only temporary and expensive solutions. We cannot address the long-standing issue of sharp periodic price spikes and fluctuations without undertaking comprehensive policy reforms and effective market regulation. It is time the government completely deregulated the sugar trade, and stopped market intervention by fixing cane crop and sugar prices as well as controlling the commodity’s import and export. Let the market determine the retail sugar prices, and the margins for manufacturers and traders.

Published in Dawn, March 18th, 2025