ISLAMABAD: A National Assembly panel headed by PTI stalwart Atif Khan on Monday sought the names of sugar mill directors holding at least 20 percent shares from the Securities and Exchange Commission of Pakistan (SECP), amid reports of Rs 300 billion windfall profits made through price manipulation in connivance with dealers.
Officials from the Federal Board of Revenue (FBR) informed the panel that at least 14 FBR officials, allegedly involved in the illegal release of sugar, have been suspended and are currently under investigation.
The Additional Secretary of the Ministry of Industries and Production told the committee that millers and dealers manipulated prices following the expiry of the sugar export deadline, earning approximately $440 million from these exports.
NA panel to probe Rs300bn sugar windfall
He briefed the panel that in the 2024-25 crop year, sugarcane cultivation increased by 1.11% compared to 2023-24. However, due to climate change factors such as heat wave and crop disease, sugarcane yield and sucrose recovery declined. Consequently, sugar production fell to 5.862 million metric tons (MMT), around 1 MMT less than the previous year. Adding carryover stocks of 0.5 MMT, total sugar availability for 2024-25 was estimated at 6.362 MMT, roughly equal to domestic consumption in 2023-24.
“This tight balance between supply and demand led to price increases by the industry from January 2024 onward, following the exports,” he added.
The committee, led by the Deputy Prime Minister, held several meetings with key stakeholders including the Pakistan Sugar Mills Association (PSMA), emphasizing price stability. They agreed to cap the ex-mill price at Rs 159/kg and the retail price at Rs 164/kg for one month, until April 19, 2025.
“In May 2025, the committee extended the status quo until June 15, 2025. However, PSMA did not comply and continued to raise prices,” he added.
The Ministry of Industries summoned sugar millers, warning them that their actions were unacceptable, but the mills disregarded the ministry’s warnings.
A track-and-trace system was installed on sugar stocks in November 2021, whereby every sugar sack is stamped with a scanable mark revealing its details, according to FBR officials. However, some sugar bags were released without stamps, allegedly involving officials deputed at the mills. So far, the FBR has seized several trucks carrying unstamped sacks. Sales tax on sugar is deducted at 18% GST rate, amounting to Rs 1,485 per 50 kg sugar bag.
Fourteen FBR officials have been suspended, and the Prime Minister has formed a special team including intelligence officials to monitor FBR operations.
Sales tax collection from sugar has increased to Rs 100 billion from Rs 65 billion last year, despite a reduction of 1 MMT in sugar production.
“We might not even need to import sugar. The current stock is sufficient until November 15, 2025,” said the Additional Secretary of the Ministry of Industries and Production.
It is estimated that only 200,000 tons of sugar may be imported, if any. Notably, 70% of sugar consumption is by industries, not the common man.
Officials from the Ministry of National Food Security and Research stated that sugar imports are planned to prevent price hikes and avoid artificial shortages amid concerns about price could rise further in November 2025.
After detailed discussions, the panel decided to summon SECP officials to obtain a list of sugar mill directors holding at least 20% shares, which will be shared with the media to reveal any political affiliations. The committee also resolved to review the Public Accounts Committee minutes where the Auditor General of Pakistan claimed sugar millers earned Rs 300 billion in profits within three weeks.
Copyright Business Recorder, 2025
Comments
Comments are closed for this article.