ISLAMABAD – The federal government made a policy-level decision to gradually deregulate the sugar industry, aiming to reduce state involvement and hand over market operations to the private sector, the official sources said on Wednesday.
The sources said that under the proposed new framework, the Trading Corporation of Pakistan (TCP) will maintain a sugar reserve equivalent to just one month of national consumption.
Beyond this buffer stock, there would be no government intervention in the sugar pricing or distribution.
As part of the deregulation strategy, the government raised the target for sugar mills’ operational capacity from 50% to 70%.
The move is expected to result in an additional 2.5 million tons of sugar production annually.
Sources within the Ministry of Industries and Production revealed that the government plans to keep a buffer stock of 500,000 tons of sugar to ensure emergency response capability.
All other market operations, including pricing and supply, will be managed by the private sector. A final draft of the policy recommendations has been prepared and is expected to be presented to the Prime Minister next week.
The proposals also include a mechanism to provide relief to low-income households through the Benazir Income Support Program (BISP), in case sugar prices rise beyond control. In such a scenario, the subsidy volume may be increased to cushion the impact on vulnerable segments of society.
