Govt decides to deregulate sugar sector in phases

ISLAMABAD (Mudassar Rana) – The government has decided to gradually deregulate the sugar sector and has finalised proposals in this regard, which will be presented to Prime Minister Shehbaz Sharif next week, according to official sources.

As per the proposed framework, the government will maintain a buffer stock of sugar equal to just one month’s national consumption through the Trading Corporation of Pakistan (TCP). Apart from that, there will be no interference in pricing or distribution by the authorities.

Sources revealed that if sugar prices spiral out of control following deregulation, the government may increase subsidies under the Benazir Income Support Programme (BISP) to ease the burden on low-income households.

The proposals also include allowing sugar exports in case of surplus production. This step is aimed at ensuring better returns for sugarcane growers and providing a much-needed boost to the national economy.

At present, sugar mills are operating at roughly 50 per cent of their capacity. The government hopes to raise this to 70 per cent, which would not only meet local demand but also allow the production of an additional 2.5 million tons of sugar. This surplus could be exported to earn around $1.5 billion in foreign exchange.

In the future, the private sector will be responsible for regulating the sugar market, while the government will only play a limited role by maintaining strategic reserves, sources added.

The draft policy is said to have been prepared after detailed consultations with all key stakeholders.

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A formal announcement is expected after the prime minister gives the green light.

“This move aims to put the sugar sector on its own feet and reduce the government’s financial and administrative burden,” an official said.