On August 16, 2025, the Government of Pakistan issued Letters of Credit (LCs) to import 85,000 metric tons of sugar under a government-to-government agreement to address domestic shortages and rising prices.
The first shipment is expected to arrive within weeks, ensuring a steady supply of sugar to help reduce prices, which have reached Rs200 per kilogram in major cities.
The initiative addresses a crisis related to seasonal supply gaps and hoarding, as highlighted by the Competition Commission of Pakistan (CCP). On August 11, CCP Chairman Dr. Kabir Ahmed Sidhu informed Finance Minister Muhammad Aurangzeb that exports, based on inaccurate data, had depleted stocks. The agreement guarantees that high-quality imported sugar will meet both industrial and consumer needs, thereby stabilising markets during periods of peak demand.
Authorities have assured that they will manage efficient distribution to balance supply and control inflation, which supports Pakistan’s food security objectives. The phased shipments, facilitated through letters of credit communicated to banks, aim to prevent further price increases and ensure a continuous supply. This approach aligns with broader economic stabilisation efforts, including a $7 billion bailout from the IMF.
The CCP briefed on past sugar crises (2008, 2015, 2019), noting supply restrictions as a recurring issue. The current strategy addresses these challenges through proactive imports and market oversight, though analysts warn that effective distribution and monitoring are critical to success. The move could set a precedent for managing commodity shortages.
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