By Staff Reporter
ISLAMABAD: The Economic Coordination Committee of the cabinet approved the export of 200,000 tons of sugar on Monday, and within hours the country’s mills publicly rejected the decision as a fraction of what is needed to clear a surplus they say is heading toward the new crushing season unsold.
The ECC, chaired by Finance Minister Muhammad Aurangzeb, cleared a summary from the Ministry of National Food Security and Research at a meeting in Islamabad. The committee endorsed the recommendations of the Steering Committee on Sugar and directed that safeguards accompany the shipments to hold domestic retail prices steady.
The Pakistan Sugar Mills Association said every industry representative present at a Sugar Advisory Board meeting held the same day opposed the quota. The association wants at least 1 million tons released for export, five times the volume approved, and said the food ministry rejected the industry’s stock data in full and did not hear its position.
Mills put national sugar stocks at more than 2.6 million tons as of Aug. 31 and average monthly consumption at 560,096 tons. On that basis, roughly 1.4 million tons will be drawn down over the two and a half months to Nov. 15, when the 2026-27 crushing season begins, leaving a carryover surplus of about 1.25 million tons. At prevailing international prices, the association values that overhang at $600 million to $700 million in forgone export earnings.
The gap between those numbers and the government’s is the heart of the dispute. Food Security Minister Rana Tanveer Hussain said this month the country would hold more than 600,000 tons of surplus sugar after meeting domestic needs, of which 200,000 tons would be shipped out. The industry’s estimate is roughly double that.
A policy that keeps reversing
The decision restarts a cycle that has cost Islamabad credibility and consumers money. The government allowed the export of 790,000 tons in June 2025, then approved imports of 500,000 tons as domestic supply tightened, ultimately bringing in only 300,000 tons. The food ministry acknowledged before the ECC last month that those exports, combined with a 15% drop in production, pushed retail prices to Rs220 a kilogram. Millers had been cleared to export only after signing an agreement with the government to hold ex-factory prices between Rs165 and Rs171 a kilogram through Oct. 15, 2025. They breached it.
Conditions today are easier. Sugar was selling at an average Rs148 a kilogram earlier this month, about 18% below year-earlier levels on the back of stronger output. That cushion is what the steering committee, chaired by Deputy Prime Minister Ishaq Dar, leaned on in recommending the release.
It is also the second export clearance in under a month. The ECC on Aug. 19 approved international tenders for 108,000 tons of sugar held by the Trading Corp. of Pakistan, stock originally imported to cool the domestic market. TCP has since invited bids for 107,739 tons, with offers due Sept. 28.
The government had refused the industry twice before this. A sub-committee under Dar declined a PSMA export request in July, saying any decision would wait until the new crushing season was under way to avoid shortages and price spikes.
Portals, prices and a grievance list
Beyond volume, mills used Monday’s meeting to press older complaints. The association said the Federal Board of Revenue’s sales-tracking portals were shut to clear the way for government-imported sugar, that the disruption drove prices up, and that access was restored only after prices came back down.
PSMA has raised the portal issue repeatedly, telling ministers that suspension of the FBR’s S-Track system left mills unable to move stock, halting supplies and creating cash-flow and loan-repayment strain. The association has argued the outages effectively favored duty- and tax-free TCP sugar without stabilizing the market.
Mills also want the refining sector fully deregulated, on the same terms extended to sugarcane. That demand lands on a government already committed to it. Under its IMF program, Pakistan pledged to abolish price controls on sugar and cane, lift the ban on new mill licenses, remove trade restrictions and forgo export subsidies, with a national policy to be agreed with the provinces and adopted by the federal cabinet by end-June 2026. Sindh’s cabinet rejected immediate deregulation and opposed scrapping crop zoning and the ban on new mills, leaving the timetable unmet.
The IMF’s Governance and Corruption Diagnostic Assessment, published in November 2025, singled out the sector as a case study in how the “intertwined relationship between economic elites and state regulators” captures public benefits at broad public cost.
Selling into strength
The timing favors sellers. ICE London white sugar futures pushed to a 16-month high near $540 a ton in late August, with nearby October and December contracts holding above $535, as the market shifted from a modest 2025-26 surplus toward a projected 2026-27 deficit of about 3.2 million tons. Brazil’s Center-South belt has swung decisively toward ethanol, with the sugar mix falling to roughly 41% from just over 50% a year earlier, cutting exportable supply.
Pakistan has shown it can move volume when allowed to. Exports reached 765,734 tons worth $411 million in fiscal 2025, against 33,101 tons and $21 million the year before.
Mills argue the next crop makes delay costlier still. Another record cane harvest is expected in 2026-27, with sugar output projected above 8 million tons against domestic demand of roughly 6.6 million. The association has warned that without export clearance, mills will struggle to keep buying cane and paying competitive prices to growers, and said Monday the government’s decision will hurt farmers and the industry while denying the country foreign exchange it cannot easily replace.
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