Pakistan has committed to fully liberalising its sugar industry by the end of June 2026 as part of its agreement with the International Monetary Fund, according to a report by The News citing official sources.
The reform will end decades of state control over sugar pricing, production, and trade. The government plans to hand the entire sugar economy over to market forces, from sugarcane farming to milling and retail sales. The approach mirrors recent deregulation steps taken in the wheat sector.
Under the proposed framework, the government will abolish price controls on both sugar and sugarcane. It will also lift restrictions on establishing new sugar mills and remove limits on sugar imports and exports. A long-standing ban on issuing licences for new mills will be withdrawn, opening the sector to fresh private investment.
Officials said zoning restrictions on sugarcane cultivation will also be scrapped. Farmers will gain full freedom to grow sugarcane in any area they choose. The government will no longer regulate the sale or use of cane. Growers will be free to sell their crop to any mill or process it into jaggery (gur) themselves.
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Trade reforms form a central part of the plan. Import duties on sugar will be reduced, export controls will be lifted, and export quotas for sugar mills will be eliminated. Mills will be allowed to import raw sugar for processing and re-export without prior government approval. They will also be free to process locally grown cane or imported raw material under open market conditions.
A key element of the reform is the complete withdrawal of government price-setting. Sugarcane and sugar prices will be determined solely by supply and demand. The framework also prohibits any formal or informal collusion by industry groups to influence ex-mill sugar prices.
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The government has also pledged not to provide any future subsidies for sugar exports. Officials said the move aims to reduce fiscal pressure and prevent policy-driven distortions that have often resulted in shortages or sudden price spikes.
To safeguard farmers’ interests, authorities plan to publish a list of banned sugarcane varieties before each sowing season. These varieties typically deliver low sugar recovery rates and can reduce farmers’ earnings.
The sweeping reforms mark one of the most significant overhauls of Pakistan’s agricultural markets in recent years. The government hopes the changes will improve efficiency, attract investment, and stabilise prices, while meeting key IMF conditions tied to ongoing financial support.
