By Staff Reporter
ISLAMABAD: The government has opened a new international tender to import 100,000 metric tons of white refined sugar, a fresh bid to tame soaring domestic prices that have strained households.
The Trading Corporation of Pakistan (TCP) said the tender, set to launch on August 11, follows a series of stalled efforts hampered by steep bid prices and logistical hurdles. Last month, a tender for the same volume drew bids from four companies, but the quoted prices, peaking at $539 per metric ton, would have pushed retail costs to as much as Rs227 per kilogram.
Authorities balked at the expense, shelving the plan in favor of a revised approach. A previous attempt on July 25 also faltered after traders shunned it, citing tight delivery schedules and restrictive shipping terms that made participation untenable.
This time, the TCP has loosened those requirements, betting that greater flexibility will draw more competitive offers from international suppliers. The shift comes after an even earlier tender for 50,000 metric tons failed to stabilize prices, prompting officials to double the import target in a sign of growing urgency. “By increasing supply, we aim to ease pressure on the local market,” a TCP official said, speaking on the condition of anonymity
Sugar prices have climbed steadily in recent months, amplifying public frustration over rising food costs. The government hopes this tender, currently under review with the lowest bid at $539 per ton, cost and freight included, will deliver relief. European traders pegged that figure as the floor, though TCP has yet to lock in a deal, leaving room for further haggling.
National Food Security and Research Minister Rana Tanveer Hussain last week pushed back against criticism, insisting Pakistan’s sugar stocks are robust. Speaking at a press conference last week, he dismissed talk of shortages as overblown. “A perception is being created as if there is a major issue regarding the availability, supply or pricing of sugar,” Hussain said, unveiling plans to crack down on hoarders and profiteers among retailers and mill owners.
Pakistan kicked off the season with 800,000 metric tons in reserve, he said, and the crushing season yielded 6.8 million metric tons against an annual demand of 6.3 million tons, a surplus of 1.3 million tons. “To prevent a supply glut that could harm both farmers and millers, the government had allowed gradual sugar exports,” he explained.
Last year, those exports totaled 750,000 metric tons, netting $402 million, though Hussain noted that earlier approval might have fetched higher returns. The strategy seemed to work at first. After exports began in October 2024, retail prices dipped from 138 rupees per kilogram to 119 rupees. But then climate change intervened.
The 2024-25 season, battered by erratic weather, produced just 5.8 million metric tons, far below the projected 7 million tons. In January 2025, the prime minister slammed the brakes on exports. By April 30, stocks, bolstered by a 0.5 million-ton buffer, hit 6.3 million metric tons, matching yearly consumption. Today, 2 million tons remain, enough for three months, Hussain said. Yet prices spiked anyway, a trend the minister pinned on market manipulation. Sugarcane procurement costs jumped from 450 to 700 rupees per 40 kilograms, he noted, driving up production expenses.
The government has since capped ex-mill prices at 165 rupees per kilogram and retail at 173 rupees, deploying enforcement teams to hold the line. Recent data shows retail prices hovering at 172-173 rupees, with ex-mill steady at 165 rupees—rates Hussain called competitive with regional peers.
The Pakistan Sugar Mills Association (PSMA) has backed the government’s narrative, at least in part. A spokesperson said mills are delivering sugar at the mandated 165 rupees per kilogram ex-mill, with stocks sufficient through mid-November 2025. Past disruptions stemmed from “divergent government measures,” since smoothed out, the spokesperson added, rejecting any link between exports and price hikes.
Those exports, they said, tapped surplus from the prior two years, with mills selling at 140 rupees per kilogram, below cost, to comply with official terms. But the PSMA also sounded alarms. Climate change and soaring sugarcane prices, now 700 rupees per maund, up from 425 rupees last season, have squeezed margins, shuttering 12 mills.
The group has called for deregulation, pointing to freer markets in rice and maize as a model. Economists see a thornier picture. Dr. Kaiser Bengali, a veteran analyst, called the sugar crisis a stubborn fixture of Pakistan’s economy, flaring every few years regardless of who’s in charge.
He blamed lax oversight, murky stock data, and a tight-knit group of mill owners with political clout, accusing them of gaming policies and engineering shortages to pad profits.
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