HYDERABAD: The demand put forward by the Sugar Mills Association (PSMA) for permission to export surplus sugar stocks has drawn sharp criticism from growers and caused concern among other stakeholders who believe that the move is bound to further push up price of the commodity as was seen in the past.

The millers will make against windfall profits as they had done last year. They had earned around Rs100bn in 2024-25 over and above their usual annual collective profit, according to growers.

Sindh had produced around 1.618m tonnes of sugar in 2025-26 crushing season. For the last two years (2024-25 and 2025-26), the Sindh government did not fix the minimum support price of sugar cane. Previously, it had notified Rs425 per 40kg price for the 2023-24 crop. It avoided to notify the cane price under IMF conditions. In the absence of the official sugar cane price, farmers argue, the average procurement price in 2025-26 invariably remained the same, Rs450 per 40kg, despite a sharp increase in the cost of production.

“There is every likelihood that sugar export will end up in a surge in market price, only to hurt consumers. It seems the government is following a script which is primarily hurting producers (growers) and consumers,” said Sindh Abadgar Board (SAB) President Mahmood Nawaz Shah.

He commented that millers had made windfall profits in the 2024-25 season. “SAB’s assessment is that the millers earned Rs100bn in 2024-25 over and above their usual profit,” said Mr Shah. “And this Rs100bn was earned by not more than 50-60 individuals who collectively own Pakistan’s sugar industry,” he asserted.

He said that SAB believes in a profitable sugar industry. “Such profit must not come at the cost of growers and consumers. In 2024-25, sugar rates were only allowed to increase when crushing season ended in April and resultantly the price rose from Rs135 to Rs175, thus an earning of Rs100bn over and above their usual profit,” he claimed.

Referring to PSMA’s letter, he said the letter claimed that sugar export would benefit consumers and farmers. However, in the last crushing season sugar cane rates remained the same but retail sugar price increased while crushing season in 2025-26 was delayed till December with the result that small growers were unable to cultivate wheat. Growers were compelled to sell sugar cane as dictated by mills.

He said PSMA’s request for permission to export sugar is not surprising. “The millers have been regularly showing a tendency of forming a cartel to negate the spirit of competitiveness. It is in this backdrop that we have opposed deregulation of the sugar sector. What we have, however, seen in the name of deregulation is that while rate of sugar cane is regulated, sugar price is not controlled,” he remarked.

“The so-called deregulation, where rates are allowed to increase to benefit the elites, and not the economy, is unacceptable as it hurts the economy,” he said.

Sugar millers had stated in the past that they had paid over and above the minimum support price to growers. They have been arguing that the price of sugar should also be fixed by government like it does in the case of sugar cane.

Sugarcane is a protected crop and the provincial legal instrument has not yet been revoked outright by government. Until recently, provincial governments have been fixing sugar cane crop price in line with their respective legislations. This year, the crushing date was notified, but not the crop rate.

Federal government has lately prepared a draft deregulation report of ‘Pakistan Sugar Sector and Policy Framework’. After its review by a ministerial committee in Sindh, the provincial government rejected wholesale deregulation of sugar cane pricing — proposed by federal government — and wants to retain the ‘Sugar Factories Control Act’ which governs the sugar industry in the province.

Sugar industry unviable

Eminent economist Dr Kaiser Bengali believes that the sugar industry is highly manipulated and influenced. “Millers are sitting in the corridors of power and they are part of the parliament. It’s not only permission for sugar export, but they will also seek rebate on sugar export because of lower international market prices. To me the argument of earning foreign exchange is false,” he said.

His view is that the sugar industry should be restricted to Sindh’s coastal areas — Thatta, Sujawal and Badin districts (in Hyderabad division). “In the rest of Pakistan, establishing sugar industry should either be banned or discouraged with taxation tools,” he stressed.

Mr Bengali said that sugar cane crop now, in fact, threatens cotton crop. “We are regularly importing cotton bales. By the way, why don’t [sugar] millers sell the stocks to consumers for somewhat cheaper rates if they have to deplete stocks in their godowns. They will only be earning less profit in this case,” he said.

Sindh Chamber of Agriculture (SCA) Senior Vice President Nabi Bux Sathio also questioned export of surplus sugar. “Government should not rely on PSMA’s claim of surplus sugar of 7.9m tonnes against an annual consumption of 6.6m tonnes. The federal and provincial governments should verify the stocks independently instead of buying millers’ argument; and if it is indeed true, then surplus stocks may be exported,” he pleaded.

The governments, he said, should also realise their legal responsibility which require them to fix the sugar cane price. “Unfortunately, in order to please the PSMA, governments have not fixed sugar cane prices in the last two years as mandated by the Act,” he said.

He called upon the federal government to protect farmers’ rights and refrain from deregulating the sugar sector at the behest of PSMA.

Published in Dawn, June 3rd, 2026