Business Recorder
LAHORE: Welcoming the government’s move to form a committee for the deregulation of the sugar sector, a majority of participants at a forum supported the idea, stating that it would not only help the industry grow by meeting local demand and exporting surplus production, but also enable growers to receive better and timely compensation for their produce. The stakeholders said that deregulation would also help the industry offload surplus national production in international markets, thereby earning foreign exchange and strengthening the national economy. However, representatives from academia (LUMS) opposed the idea on the grounds that unbridled exports could harm consumer interests, while questions regarding the sustainability of deregulation versus regulation also persist. There was, nevertheless, a consensus on the issue raised during the forum that no new sugar mills should be allowed to be set up until the approximately 90 mills currently operating in the country achieve their full production potential. The forum was organized by “Business Recorder” on “Deregulation of the Sugar Sector” and was attended by representatives of the Pakistan Sugar Mills Association (PSMA), farmers, economists, academia, and researchers. Opening the forum, PSMA Chairman Ch Zaka Ashraf said that the survival of the sugar industry lies in the deregulation of the sector, which is the need of the hour. He stated that it would be beneficial for both growers and the industry, adding that growers would receive international prices for their crops. He also appreciated the government for advancing the proposal for deregulation of the sugar sector at the behest of the IMF. He said deregulation would help the industry make its own decisions. “If all decisions have to be taken by the government and the bureaucracy, then it will hinder the smooth functioning of the industry,” he observed. Referring to the success story of Brazil’s deregulation, Zaka claimed that Brazil became the largest producer and exporter of sugar after deregulating its sugar sector in 1995. He said that deregulation increased Brazil’s sugar production from 15 million to 45 million metric tons, of which around 20 million metric tons are exported. He further noted that Brazil shifted its dependence from fossil fuels to environmentally friendly bio-ethanol fuel and introduced flex-fuel vehicles with a mandatory 30 percent blend. He added that Thailand, another major sugar-producing country, has also deregulated its sugar sector and has become the third-largest producer and exporter of sugar. Zaka Ashraf said that during the current crushing season, sugar mills have produced nearly 1.3 million tons of surplus sugar, which is expected to reach between 1.5 and 2.0 million tons in the next season. These surplus figures, he said, are agreed upon by all stakeholders and verified through the FBR’s track-and-trace system installed in every sugar mill, with 99 percent accuracy. He claimed that sugar worth approximately US$500 million is currently lying in the godowns of sugar mills and stressed that it is high time to export sugar, as international prices are rising due to the Iran war. He added that mills are incurring mark-up costs on bank loans taken against the surplus stock, and its disposal would facilitate timely payments to both the banking sector and growers. Group Director Muhammad Rafique of JDW Sugar Mills, speaking on the occasion, said that the crushing season, which started on November 16, 2025, has not yet concluded, and mills have produced about 7.6 million tons of sugar. He added that if production from beetroot—estimated at around 86,500 tons—is included, along with the carryover stock from the previous year, total stocks would reach approximately 8 million tons. He said they had proposed to the government that if 7.2 million tons are retained—sufficient for 13 months of consumption—then around 800,000 tons would be available as exportable surplus. “If calculated at US$425 per ton, it can help Pakistan earn US$350 million by offloading these stocks in the international market,” he added. Supporting the idea of complete deregulation of the sector, he said that the Punjab government deregulated sugarcane prices two years ago, which resulted in better prices for farmers. Muhammad Rafique also highlighted the research and development activities being carried out by his organization to produce new seed varieties with higher per-acre yields and resistance to diseases. Brig Safeer Vaseer, Chairman PSMA South Zone, said in his remarks that 30 percent of the sugar produced in the country is used by domestic consumers, while 70 percent is consumed by commercial and industrial users. He was of the view that deregulation would be beneficial for all stakeholders, including the country, mills, and farmers. Pakistan Kissan Ittehad (PKI) President Khalid Mahmood Khokhar said that the sugar sector should be deregulated from start to finish. He also said that if the industry is sufficient to meet existing demand, there is no need to set up new mills. He further proposed that an independent commission should be established after deregulation to determine how much sugar has been produced in a specific season and how much can be exported. He also lamented that the research budget in the agriculture sector is minimal and was of the view that the private sector can conduct research more effectively. He called for a return to cotton, noting that it remains the largest contributor to the country’ exports. He criticised the bureaucracy and held it responsible for the decline in the agricultural sector. Anjuman Kashtkaran President Rana Iftikhar Muhammad also supported the idea of deregulation. He said sugarcane sowing is increasing while cotton sowing is decreasing due to climate change. He added that growers are not receiving prices sufficient to even cover their input costs. Director Business Recorder Research Ali Khizar appreciated the effort of convening such a meeting, where all stakeholders could sit together and discuss this important issue. He said that rice and maize are two success stories in Pakistan, where not only yields increased but farmers’ prosperity was also ensured. Former Attorney General of Pakistan, Shehzad Elahi, said that although there was a ban on setting up new mills—which benefits existing mills—he supported complete deregulation. He said there is no benefit in producing an item at a cost of Rs 10 and selling it at the same price due to government intervention. He added that three laws—essential commodities, foodstuffs, and anti-hoarding acts—would remain intact even if the sugar sector is deregulated. Prof. Ijaz Nabi said that the government had set up two committees on the subject. However, he claimed that private sector representatives have differing views on various aspects of deregulation. He said the Prime Minister is adept at handling bureaucrats, but the private sector should develop a consensus viewpoint. He added that the consensus being presented at the forum is not being reflected in the committees formed by the government. He, however, opposed the idea that the entire sector should be deregulated while simultaneously barring the establishment of new mills. Prof. Ijaz Nabi further said that representatives of the auto and textile sectors are raising similar concerns about over-regulation. He remarked that, in fact, the private sector is trying to protect its profits. He noted a shift in the mindset of the current political leadership, adding that the trade policy announced last year before the budget was an effort to address root causes, and the government now aims to resolve these issues. Regarding the IMF, he said it is primarily concerned with bridging trade deficits and ensuring that countries do not repeatedly return for assistance despite receiving support. Dr. Ummad Mazhar of the Lahore University of Management Sciences (LUMS) said that neither complete deregulation nor excessive regulation is beneficial for the sector. He noted that when the government regulates an industry, it aims to safeguard consumer rights. He warned that cartelization is a major issue in Pakistan and that deregulation should not lead to such outcomes. He added that regulations are also necessary to ensure quality control and noted that international sugarcane prices are determined based on sucrose content. He emphasized that the rights of small growers must be protected in any decision-making process and proposed that export decisions should be made after reviewing conditions at district and divisional levels. “There should not be any unbridled export,” he added. Dr Anjum Fayyas from LUMS echoed similar views, stating that, coming from a business family, he knows that price pooling is common practice. He said the government should evaluate whether the proposed Minimum Support Price has actually benefited growers. He questioned whether past regulation and current calls for deregulation are driven by political motives, such as securing votes. He stressed the need to eliminate middlemen exploitation, ensure farm-to-market access for farmers, and improve their access to finance. Pro Vice Chancellor of the Agricultural University of Faisalabad, Dr Muhammad Sarwar, regretted that research and extension wings were separated from academia in the 1960s. However, he noted that government priorities are now changing. He said that two GMO varieties of sugarcane have been developed and submitted for approval to the relevant forums. “It took us many years to obtain these approvals,” he added. He emphasized the need for a change in mindset, noting that the sector is fully deregulated in Brazil, where sugarcane is also used to produce bio fuel and alcohol. Shahid Afghan, CEO of the Sugarcane Research & Development Board (SRDB), spoke about adhocism in the government sector. He said he has been serving as acting CEO since 2016. He noted that germplasm is imported for research to develop new varieties and questioned why foreign entities would share research conducted for their own benefit. He disclosed that there are seven research institutes in the country, of which six operate in the private sector and one in the public sector. Copyright Business Recorder, 2026
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