A parliamentary panel, chaired by Dr Mirza Ikhtiar Baig, has concluded that inaccurate sugar production and stock data supplied by the Pakistan Sugar Mills Association (PSMA), combined with the absence of real-time and reliable information from the Federal Board of Revenue (FBR) and provincial Cane Commissioners, led to flawed sugar export decisions and contributed to sharp price hike, Business Recorder reported.
The panel was mandated to examine the causes behind rising sugar prices and to identify entities, individuals, or officials responsible for decisions allowing sugar exports or imports in recent years.
According to the panel’s findings, disruptions in the S-Track monitoring portal resulted in untracked movement of sugar, creating space for market manipulation and retail-level profiteering. It noted that the selective issuance of no-objection certificates enabled distortions, while excessive administrative controls were misused.
The panel also observed that government engagement with PSMA on price-setting effectively legitimised cartel-like behaviour. It questioned the decision to import sugar despite indications of sufficient domestic availability at the time.
The Competition Commission of Pakistan (CCP) briefed the panel on its past and ongoing interventions in the sugar sector. The Commission said it has conducted multiple inquiries since its establishment, imposed penalties amounting to Rs44 billion, and issued policy recommendations, including a comprehensive sector study in 2018.
Following the 2025 sugar price surge, when prices rose from around Rs120 per kilogram to above Rs200, the CCP launched a detailed probe. It told the panel that export approvals were granted in six phases between November 2023 and January 2025, based on recommendations of the Sugar Advisory Board, which relied on production and stock data provided by PSMA. The final approval of 500,000 metric tons in January 2025 was identified as a major factor contributing to domestic shortages.
The CCP stated that PSMA overstated sugar production by about 1.33 million metric tons and provided inaccurate carry-forward stock figures, leading to multiple export approvals on faulty data. It added that repeated requests to the FBR for accurate stock information did not yield the required data, while reporting by provincial Cane Commissioners remained inconsistent. A fresh investigation into potential market abuse and penalties for 2025 is currently underway.
The panel’s convener noted that the lack of real-time data in 2025 prevented timely enforcement action against mills suspected of cartelisation and supply withholding.
The committee put forward a wide-ranging set of recommendations, including establishing an integrated, real-time data-sharing system linking the FBR, Cane Commissioners, CCP and relevant ministries; verifying export decisions through independent assessments; maintaining a minimum buffer stock of 540,000 metric tons at all times; and fixing accountability for officials or institutions providing misleading data.
Other proposals include gradual deregulation of the sugar sector to reduce distortions, clear rules for Trading Corporation of Pakistan procurement, audits of past import decisions, stronger legal powers for the CCP, enforcement of timely crushing by provinces, and action against retail profiteering. The panel concluded that deregulation remains the only sustainable long-term solution to prevent recurring sugar crises.