Govt approves re-export of 108,000 tons of sugar amid price hike fears

ISLAMABAD: For the first time in Pakistan’s history, the government has decided to re-export 108,000 metric tons of sugar that it imported last year, triggering fears of another spike in domestic prices and fresh allegations that the move is designed to benefit the “sugar mafia.”

The decision, approved by the Economic Coordination Committee (ECC), has been slammed by economic experts as proof of government “incompetence” and a repeat of a costly cycle that ultimately burdens the public.

The Cycle: Export, Hike, Import, Re-Export

Experts outlined how the pattern has repeated under multiple governments:

1. Export cheap sugar claiming surplus: Last year, 790,000 tons of sugar were exported on the promise that it would earn foreign exchange without impacting local prices.

2. Local prices soar: Following exports, domestic sugar prices rose to Rs. 220 per kg, with mill owners making “huge profits.”

3. Import expensive sugar: In June last year, the government approved import of 500,000 tons through the Trading Corporation of Pakistan (TCP), waiving 53% in taxes and duties including sales tax, excise and customs duty. 300,000 tons were brought in with a promise to sell it cheap to the public.

4. Re-export unsold imports: Unable to sell all 300,000 tons, the government has now approved re-export of 108,000 tons of that same imported sugar.

Allegations: Mafia Gains and IMF Violation

Critics allege the entire cycle allows “billions in extra profit” for sugar mill owners.

They also warn the decision violates Pakistan’s commitment to the IMF to refrain from interfering in the commodity market.

“Right now it is August, and there is a very real risk that by exporting this sugar, prices will rise again in the local market, just as has happened before,” experts warned.

“First you say there is plenty of sugar, export it to earn foreign exchange and protect the public’s pocket. Then prices go up. Then you import expensive sugar and promise to sell it cheap. When you can’t sell it, you export it again,” one analyst said.

“Is all of this being done again to benefit the mafia? So that prices rise again, the burden on the public increases, and the mafia keeps making profit after profit?”

Government’s Defense: Stocks Stable, No Impact

The government has defended the move as stable management of buffer stocks.

Federal ministers, including Information Minister Attaullah Tarar and Food Security Minister Rana Tanveer, state that current domestic stocks are sufficient and market conditions are stable.

Officials maintain that re-exporting a portion of previously procured or surplus stock will not cause a shortage or raise prices for consumers.

The Ministry of National Food Security & Research asserts that public-sector tenders via TCP follow transparent PPRA rules to balance local affordability with market adjustments.

Critics and Industry Response

Policy Contradictions: Former finance minister Miftah Ismail and opposition critics argue that exporting sugar after earlier shortages — and now re-exporting state-imported stock at lower international rates than purchase costs — results in a financial loss for the national exchequer.

Price Volatility: Critics claim past export permissions artificially spiked retail prices, harming citizens before state-led imports tried to balance the market.

Industry Demands: The Pakistan Sugar Mills Association (PSMA) contends that large carryover stocks justify regular, predictable export quotas to support growers and mills without triggering domestic inflation.

The government has not yet issued a detailed response on how the re-export will impact domestic supply in the coming months.

Key Figures

• 790,000 tons: Sugar exported last year
• 300,000 tons: Imported via TCP with 53% tax waiver
• 108,000 tons: Now approved for re-export
• Rs. 220/kg: Domestic price after last year’s exports

Govt to re-export 108,000 tons of imported sugar.
Cycle: Export cheap → Prices hit Rs. 220/kg → Import expensive → Re-export now.
Experts call it “incompetence” that benefits sugar mafia.

790K tons exported, 300K imported, now 108K re-exported.
Who profits? Who pays?

Sugar Cycle: 790K Exported → 300K Imported → 108K Re-Exported | Price Risk: Rs. 220/kg”_