ISLAMABAD: Pakistan’s efforts to carry out full deregulation of the sugar sector under an International Monetary Fund (IMF) condition have seen little progress, with key provincial legislation yet to move forward despite looming deadlines.
Read More: Sugar mills push for deregulation to boost farmers’ profits
Officials say the federal government had committed to removing all state intervention in sugar pricing, procurement and trade as part of its ongoing IMF programme. The IMF has reportedly set March 2026 as the deadline for deregulation, while the federal government is required to completely exit the sector by June 2026.
Under the planned model, the sugar market would be left entirely to private players. Mills would freely set prices, procure sugarcane based on market signals, and engage in both domestic distribution and export without state restrictions. Provinces were asked to draft legislation to support this transition, but progress has been minimal so far.
The proposed framework aims to boost competition and enable surplus production to be exported, which proponents believe could lead to better returns for sugarcane farmers and greater flexibility for investors. Farmers, in turn, would not be compelled to cultivate sugarcane or sell to designated mills, ending long-standing procurement controls.
Additionally, restrictions on establishing new sugar mills and curbs on exports would be lifted once deregulation takes effect. The federal government also maintains that reforms would reduce fiscal exposure, prevent political interference, and align Pakistan’s agricultural markets with global norms.
However, critics warn that deregulation may expose consumers to price volatility in the absence of government oversight, given Pakistan’s history of cyclical shortages and price spikes. Provinces have also expressed reservations over legislative timelines, and industry players remain divided over the pace and sequencing of reforms.
Read More: Sugar prices may drop as Punjab mills start new crushing season
With negotiations ongoing and deadlines nearing, policymakers face the challenge of balancing IMF commitments with provincial concerns and market realities.