By Staff Reporter
ISLAMABAD: Pakistan plans to import 350,000 tonnes of sugar in two phases via its state-owned Trading Corporation to stabilise domestic prices, the National Food Security Ministry said Wednesday, as retail rates climb to nearly Rs200 per kilogram in some regions.
The import strategy, finalised in a meeting led by Minister Rana Tanveer Hussain, kicks off with a 200,000-tonne tender, followed by a 150,000-tonne tender a week later.
The import volumes were calculated based on immediate market needs and anticipated demand in the coming weeks. The sugar, described as a premium, coarse-grain variety commonly consumed in Pakistan, will undergo rigorous post-shipment quality inspections to meet market standards.
To ease the financial strain on consumers and counter inflationary pressures, the government has scrapped all duties and taxes on sugar imports. “To facilitate this process, the government has exempted all duties and taxes on sugar imports so that sugar can be made available to the general public at affordable prices and inflationary pressures can be eased,” the ministry said in a statement.
The Federal Board of Revenue (FBR) has exempted Customs duty on the import of 500,000 metric tons of sugar, slashed the sales tax rate from 18 percent to 0.25 percent, and reduced withholding tax to 0.25 percent.
These measures, detailed in FBR notifications SRO 1215(I)/2025, SRO 1216(I)/2025, and SRO 1215(I)/2025 issued on Wednesday, also waive the 3 percent minimum value-added tax.
The tax relief applies to imports by the TCP or the private sector and remains in effect until September 30, 2025. The imports will be handled exclusively through the TCP under government oversight to ensure transparency and quality control. The Commerce Division will oversee quality assurance, enlisting an international inspection firm to verify standards, as stipulated in the FBR’s conditions.
The import move comes after a massive export boom left local supplies depleted and consumers facing a 36 percent price hike. Sugar exports soared 2,200 percent in the last fiscal year, with 765,734 tonnes shipped between July and May, generating Rs114 billion in revenue. While the export windfall bolstered Pakistan’s foreign exchange reserves, it has wreaked havoc on the domestic market.
Retail sugar prices have climbed to Rs200 per kilogram from Rs140, driven by a 14 percent drop in production to 5.9 million tonnes this year, hit by adverse weather and reduced cane yields. With annual consumption at 6.4 million tonnes, current stocks of 2.8 million tonnes are projected to last only until November, the Pakistan Sugar Mills Association (PSMA) said, based on a monthly demand of 535,000 tonnes.
The government in past defended its earlier export policy, noting that sugar was shipped out at a time when sugar was available in abundance. Now, imports are deemed essential to offset the shortfall. The 500,000-tonne shipment, priced at Rs153 per kilogram (excluding duties), offers a Rs37 discount to the domestic peak, providing a cost-effective stopgap.
The government’s initial green light for exports has drawn flak. Critics argue it favored sugar millers’ profits, bolstered by the Rs114 billion windfall, over consumer affordability. The PSMA, long accused of cartel-like practices, has suggested measures like cracking down on smuggling and advancing the next crushing season to ease supply woes. Skeptics, however, see these as bandaids on a self-inflicted wound.
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