ECONOMIC decisions made in panic, without credible data to base them on, invariably backfire. The government’s decision earlier this year to import sugar to stabilise the market in times of shortages is a case in point. The sweetener’s retail prices have surged in parts of the country, including Karachi where the rate has already jumped to Rs210-215 per kilo, well above the official price of Rs174-77. This is despite the start of the new harvest when prices typically remain stable, at least in the early months of the crushing season. The reason for the current spike appears to be the government’s push to clear imported sugar first through administrative and regulatory restrictions on the supply of locally produced sugar in the market.

The closure of the FBR’s sales-tracking portal is a major factor interrupting the dispatch of sugar from mills. The curbs on its movement across provinces have further restricted the free flow of stocks, creating localised scarcity and price hikes. In Punjab and elsewhere, traders complain that mills are being forced to sell sugar only to designated government distributors — another way of controlling retail supply, but at the cost of consumers. Market manipulation by the government for price stability is not new in Pakistan. However, it is perhaps for the first time that a government has pushed local producers out of the competition to clear its own imported stocks, even though it means burdening low-income families. Sugar millers cannot absolve themselves of their role in the situation they find themselves in today. Their reluctance to provide exact production data to the authorities in order to evade taxes and manipulate the market closer to the start of the new harvest and higher-demand months must have led the authorities to panic and make knee-jerk decisions. Whether the market is manipulated by the government or mill owners, the sufferers are always ordinary consumers. This will continue until the sugar market is completely deregulated.

Published in Dawn, November 26th, 2025