The Pakistan Sugar Mills Association (Punjab Zone) has announced that the sugar industry will provide sugar at a discounted rate of Rs130 per kg during Ramazan through designated sale points across the country. The industry expressed support for the federal and provincial governments’ efforts to ensure affordable sugar prices for consumers during the holy month.
A spokesperson for the association stated that sugar prices are largely dictated by supply and demand, but speculators manipulate the market by spreading misleading information to profit at the expense of consumers, farmers, and the industry. The association urged the government to take action against these elements to stabilize the market.
Following last year’s sugar exports, domestic sugar prices declined and remained low, but no sugar exports have been permitted in the current crushing season. The industry claims that despite low sugar recovery rates, high taxation, and rising production costs, Pakistan produces one of the cheapest sugar varieties globally. In contrast, the imported cost of sugar currently exceeds Rs200 per kg due to crop shortages in India and Brazil.
Inflation has significantly impacted sugar production costs since 2021, with sugarcane prices forming 80% of total production expenses. The Minimum Support Price (MSP) of sugarcane rose from Rs225 to Rs300 per maund in the 2022–23 season, a 33% increase from the previous year. In 2023–24, the MSP was raised further to Rs425 per maund, marking a 41% hike.
During the ongoing crushing season, sugarcane prices have surged to Rs600 per maund, with the season’s average price hovering around Rs500 per maund, significantly higher than last year’s regulated MSP. Apart from rising cane prices, sugar mills are also dealing with high-interest rates, increasing minimum wages, expensive imported chemicals and spare parts, and the carrying cost of 1 million metric tons of surplus sugar from last year, which has added to financial pressures on the industry.
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