LAHORE: The Pakistan Sugar Mills Association (PSMA) on Monday urged the government to immediately allow export of surplus sugar and move towards full deregulation of the sector, warning that continued restrictions are causing heavy financial losses to millers despite a bumper production year.
Addressing a press conference, PSMA Chairman Ch Zaka Ashraf and other representatives said the sugar industry, Pakistan’s second largest agro-based sector after textiles, plays a critical role in the national economy, generating over Rs1,000 billion in annual economic activity across agriculture, transport, and allied industries. The sector also contributes around Rs 300 billion in taxes and provides import substitution worth approximately USD5 billion annually.
They maintained that despite being one of the most documented and compliant sectors, the sugar industry remains “over-regulated,” particularly in the domestic market where provincial governments continue to determine ex-mill prices, control supply mechanisms, and enforce payment timelines. “While nearly 70% of sugar used in commercial and industrial sectors is deregulated, the segment catering to domestic consumption is still heavily controlled, creating distortions in the market,” the PSMA officials stated.
The association reiterated that successive governments had committed to deregulating the sector, but implementation has yet to materialize. It stressed that deregulation would improve efficiency, encourage investment, and align the industry with market-driven dynamics.
Highlighting production figures, the PSMA said that as of March 25, 2026, sugar production had reached approximately 7.5 million tons, with expectations to touch 7.7 million tons by the end of the crushing season. Including an additional 100,000 tons from beetroot, total sugar availability is projected at 8.071 million tons. Against an estimated domestic consumption of 7.02 million tons over 13 months, the country is likely to face a surplus of around 1.05 million tons.
“In light of this surplus and rising production costs, the industry is facing severe financial stress due to inventory carrying costs,” the association noted, urging the government to permit exports without delay. It argued that Pakistan has the capacity to produce up to 12 million metric tons of sugar annually, enabling exports of as much as 6 million tons and generating up to USD4 billion in foreign exchange. An additional USD1 billion could be earned through ethanol exports, it added.
The PSMA also called for revival of ethanol blending policies in fuel, similar to models adopted by regional countries, to reduce reliance on costly petroleum imports. It noted that Pakistan had previously introduced such policies in 2006 and 2009, but these were later withdrawn. The association proposed that up to 20% ethanol blending in petrol could significantly ease the country’s import bill while supporting the local sugar industry.
The association further highlighted the sector’s contribution to energy generation through bagasse, stating that surplus power produced by sugar mills can support industrial needs and contribute to the national grid. On the agriculture side, the PSMA expressed satisfaction over improved sugarcane output this season, attributing it to better crop prices and timely payments to farmers, which helped restore grower confidence.
Concluding, the association emphasized that timely policy intervention, particularly export permission and deregulation, would not only stabilize the sugar industry but also help the country earn much-needed foreign exchange and sustain rural livelihoods.
Also present at the press conference were Chaudhry Aslam, Chairman (North Zone) of the Pakistan Sugar Mills Association; Muhammad Rafiq of JDW Sugar Mills; Muhammad Shakeel, Chief Executive of Ittehad Sugar Mills; Faisal Ahmed Mukhtar, CEO of Fatima Sugar Mills; Owais Butt of Haq Bahoo Sugar Mills; Ali Altaf Saleem of Shakarganj Sugar Mills; Imran Ahmed, Secretary General of PSMA (Central); and Sohail Shahzad, Secretary General of PSMA (North Zone).
Copyright Business Recorder, 2026
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