ISLAMABAD: A parliamentary panel has found that inaccurate sugar production and stock data provided by the Pakistan Sugar Mills Association (PSMA), along with the failure of the Federal Board of Revenue (FBR) and provincial Cane Commissioners to provide real-time and reliable information, led to flawed sugar export decisions. The panel, headed by Dr Mirza Ikhtiar Baig, was tasked with investigating the causes of high sugar prices and identifying entities, individuals, or officials responsible for past decisions, permitting the export or import of sugar. The panel observed that disruption of the S-Track portal resulted in unmonitored movement of sugar, significantly inflating prices and encouraging retail profiteering. It further noted that the selective issuance of no-objection certificates (NOCs) facilitated market manipulation. Excessive regulation created opportunities for misuse, while government price-setting engagements with PSMA effectively legitimised cartel-like behaviour. The decision to import sugar was also questioned, as it was taken despite the availability of sufficient local supplies. Competition Commission spells out reasons behind sugar crises According to the Competition Commission of Pakistan (CCP), since its establishment, it has intervened in the sugar sector multiple times through cartel detection, prosecution, and policy-level measures. The CCP issued several policy notes and conducted a comprehensive study in 2018, making detailed recommendations. Following the emergence of the sugar crisis in 2025, the CCP initiated an in-depth review to examine its underlying causes. The CCP informed the panel that it has conducted several inquiries into the sugar sector and imposed penalties amounting to Rs44 billion. It added that the latest probe, launched in 2025 after sugar prices surged from Rs 120 to over Rs 200 per kilogram, revealed a recurring pattern linked to export decisions. These export approvals were granted on the advice of the Sugar Advisory Board (SAB), which relied on production and stock data supplied by PSMA. Sugar prices rose sharply in 2025, reaching Rs 168 per kg in March, Rs 184 in July, and exceeding Rs 200 at present. The CCP noted that the government allowed sugar exports in six phases between November 2023 and January 2025, with the final approval of 500,000 metric tons in January 2025 contributing to domestic shortages. The Commission further stated that PSMA overstated production by approximately 1.33 million metric tons and submitted inaccurate carry-forward stock figures, resulting in multiple export permissions being granted on faulty data. The CCP added that it repeatedly sought accurate information from the FBR but did not receive it, and that a comprehensive investigation into potential market abuse and applicable penalties for 2025 is currently underway. The CCP emphasised that its enforcement actions depend on reliable data, but information provided by provincial Cane Commissioners remained patchy and insufficient. It stressed the need for real-time data from the FBR to accurately determine stock positions and identify mills that may be withholding supplies. The panel’s convener observed that in 2025, the absence of real-time data and inconsistent reporting by Cane Commissioners prevented the CCP from taking timely action against mills suspected of cartelisation. The panel submitted a series of recommendations, including: (i) establishment of an integrated real-time data-sharing system among the FBR, Cane Commissioners, CCP, and relevant ministries and departments; (ii) gradual deregulation of the sugar sector to reduce distortions and excessive reliance on administrative controls; (iii) verification of all export decisions through independent assessments prior to approval; (iv) maintenance of a minimum buffer stock of 540,000 metric tons at all times, with no exports allowed unless adequate reserves are ensured in advance to prevent artificial shortages; (v) accountability for individuals and departments providing inaccurate, misleading, or manipulated data; (vi) a detailed CCP investigation into retail-level profiteering; (vii) enforcement of timely commencement of crushing by provincial governments through Cane Commissioners; (viii) development of clear parameters for sugar procurement by the Trading Corporation of Pakistan (TCP); (ix) legal reforms to strengthen CCP’s enforcement powers and penalty mechanisms; (x) an audit of sugar import decisions to determine their justification in light of domestic stock levels; (xi) standardisation and prioritisation of sea-route logistics to minimise smuggling and stabilise supply chains; (xii) appropriate action against institutions, entities, individuals, or officials responsible for past export or import decisions; and (xiii) deregulation of the sugar sector as the only viable long-term solution to prevent future crises. Copyright Business Recorder, 2025