Sir, according to Mettis Global, the global price of Sugar No. 11 stood at 16.56 cents per pound on July 30, with a daily range between 16.37 and 16.74 cents.
This translates to approximately $0.36 per kilogram, or around Rs104 per kg. In contrast, as of July 20, domestic retail prices in Pakistan ranged from Rs180 to Rs210 per kg.
This stark differential stems from a ‘multi-layered’ sugar cartel, sustained by political patronage and regulatory failure, which distorts the market and fuels rent-seeking. This disparity imposes an additional burden of roughly Rs600 billion on Pakistan’s 240 million consumers—equivalent to about Rs500,000 per household.
The sugar cartel thrives on two reinforcing forces: political patronage and regulatory failure. Overregulation, rather than ensuring fair competition, has distorted the market and created rent-seeking opportunities. These distortions enable the cartel to manipulate both prices and supply, shifting – Rs600 billion – the cost of inefficiency onto Pakistani consumers.
Sir, you have a rare opportunity to act decisively: fully deregulate the sugar sector, dismantle the entrenched cartel, and align domestic prices with global markets. In doing so, you can deliver long-overdue relief to Pakistani consumers.
In 2010, the Competition Commission of Pakistan (CCP) conducted an inquiry that uncovered collusive price-fixing by the Pakistan Sugar Mills Association (PSMA) and several sugar mills. This led to a record Rs44 billion fine. Yet, court stays from the Sindh and Lahore High Courts stalled enforcement—effectively shielding the cartel and reinforcing its impunity.
Sir, you have a historic opportunity to deregulate the sugar market, eliminate the 40 percent import tariff, and allow Pakistan’s private sector to import sugar without prior approval. By taking these steps, Prime Minister Shehbaz Sharif can deliver transformative relief—saving Pakistani consumers an estimated Rs600 billion annually.
Prime Minister Shehbaz Sharif can unshackle the sugar sector from its colonial legacy and political capture, providing relief to millions. Please act decisively to restore fairness and affordability to Pakistan’s sugar market.
