With each passing year, the sugar crisis in Pakistan has been getting worse with no solution in sight. With the never-ending export-import cycle, prices have been rising without any check. The Auditor General of Pakistan recently revealed a staggering Rs300 billion profit made from recent sugar price hikes, during a meeting of the Public Accounts Committee (PAC).

This highlights the corruption in the country’s sugar industry, involving top political families and elite businessmen who have been profiting at the expense of the public. According to PAC member Riaz Fatyana, the public was cheated out of Rs287 billion through manipulation of sugar prices. PAC member Sanaullah Mastikhel pointed out that every Re1 increase in sugar price brings in Rs44 billion in profit for the mill owners. The Public Accounts Committee has now sought records of sugar mill owners and exporters to determine the cause behind the escalation in the price of sugar in the domestic market.

It is being widely questioned in the country why sugar was exported only to be imported back in the same year, and from the same countries in some cases. Some observers have rightly called it a deliberate ploy to manipulate supply and pricing. As per media reports, President Asif Ali Zardari is the largest sugar mill owner in the country, followed by Jahangir Tareen and the Sharif family. Fifty percent of sugar mills belong to industrialists, and the other 50% are owned by the political elite.

It is no secret that the names of the sugar mill owners, who profit from sugar price hikes, are never disclosed. It is also a fact that when political families, who own sugar mills, are in power, sugar is first exported and then imported and the Pakistani consumers are made to pay more per kilogram. Last week, Federal Board of Revenue (FBR) officials submitted a list of sugar mill directors across the country, while the Ministry of Industries confirmed that the cabinet had approved the import of 500,000 metric tons of sugar — of which 300,000 metric tons were imported immediately.

The Sugar Advisory Board first approves the sugar export policy which is then endorsed by the ECC and the federal cabinet. This means that the entire government machinery is involved in the process. The Sugar Advisory Board (SAB), headed by the Minister for Food Security and Research, with provincial cane commissioners and representatives from the politically powerful Pakistan Sugar Mills Association with 80 plus members reviews the sugar stocks to determine scarcity and or surplus. The SAB recommends exports to the Economic Coordination Committee (ECC) of the Cabinet, the highest economic policy making forum, only if there is an assurance that there are surplus stocks and exports would in no way impact domestic prices. But these assurances are often based on falsified figures. In past years, allowing exports has been accompanied by a subsidy paid at the taxpayers’ expense on the plea that the international price of sugar is lower than the cost to the mill owners.

In mid-October 2024, the Sugar Monitoring Committee, under Deputy Prime Minister Ishaq Dar, allowed export of 0.500 million metric tons (MT) of sugar, in addition to the already approved 0.140 million MT, based on the following data: 2.054 million MT of sugar was available with 5.465 MT consumed domestically in ten months, 0.900 million MT was projected to be used in the next two months premised on the September data (which was 0.450 million MT). These exports were allowed on falsified data as proved by the subsequent rise in domestic prices reaching a high of 210 rupees per kg.

The root of the sugar crisis is the careless and cavalier attitude of mill owners towards sugarcane growers. At the start of every season, the growers can be seen lined-up with their canestocks outside the sugar mills which are not accepted by the mill owners due to various reasons ranging from a deliberate delay in the start of crushing due to price disputes, capacity limitations of mills and the middlemen who cheat the farmers. The cane is accepted after hard negotiations driving the price downward. The next stage is payment by the sugar mills which is unduly delayed in most cases.

Opposition parties have demanded the formation of a high-powered judicial commission to investigate the sugar scandal but no action has yet been taken. Expert opinion is that the sugar scandal is a planned plundering operation orchestrated by those sitting in the corridors of power. The sugar export policy is so designed as to generate exorbitant profits through price manipulation, hoarding, export and re-importation.

As pointed out by experts, it is important to fix the sugar price once during the crushing season to protect consumers and prevent undue profiteering. The sugar sector is in need of a complete overhaul and the sooner it is done, the better.