PKI President calls for complete deregulation of sugar sector

LAHORE: Complete deregulation of the sugar sector can establish an efficient, market-driven and sustainable framework capable of addressing domestic as well as export surplus challenges, said Pakistan Kissan Ittehad (PKI) president Khalid Mahmood Khokhar.

Addressing a press conference on Friday, he urged the government to allow the export of one million tons of sugar before the start of the crushing season on November 15, warning that failure to address the issue of surplus sugar could adversely affect sugarcane prices and farmers’ income.

According to the Pakistan Economic Survey 2025-26, sugarcane contributes around 0.8 percent to Pakistan’s GDP and 3.2 percent to agricultural value addition, making it an important component of the country’s agricultural and agro-industrial economy.

During FY2025-26, the area under sugarcane increased by 2.4 percent to around three million acres, while production rose by 6.2 percent to a record 89.45 million tons.

Average yield also improved by approximately 3.7 percent to 780 maunds per acre.

The long-term increase in sugarcane productivity, from around 471 maunds per acre in the early 2000s to approximately 780 maunds per acre in 2025-26, demonstrates Pakistan’s potential to further improve crop yields.

Khokhar pointed out that the country was heading towards another bumper sugarcane crop, with cultivation reported at more than 3.5 million acres, and production expected to increase by 10 to 15 percent over last year.

At the same time, Pakistan is carrying a surplus sugar stock of approximately 1.3 million tons, raising concerns that the excess supply could ultimately put downward pressure on sugarcane prices when the new crushing season begins.

To protect farmers from a possible price decline, the government should immediately authorize the export of one million tons of sugar before the crushing season, he demanded.

Khokhar recalled that farmers had faced a similar situation during 2017-18, when a delay in taking a decision on sugar exports resulted in a substantial decline in sugarcane prices and caused an estimated collective loss of around Rs100 billion to farmers.

For a sustainable and competitive sugar industry, he proposed complete deregulation, under which imports, exports, production and pricing would be determined by market forces rather than government permissions, approvals and administrative controls.

He also called for a moratorium on the establishment of new sugar mills until existing industry capacity reaches at least 75 percent utilization.

This, he argued, would ensure more efficient utilization of existing infrastructure and resources before additional capacity was introduced.

Once establishment of a new mill was allowed, a minimum distance of 50 miles between sugar mills should be maintained to prevent excessive concentration, improve commercial viability and promote healthy competition, Khokhar proposed.

Another key demand was the abolition of Sugar Acts in all provinces to remove regulatory distortions and create a genuinely deregulated and market-driven sugar industry.

According to the proposed framework, such reforms would encourage sugar mills to focus on improving per-acre productivity within their respective catchment areas, thereby ensuring an adequate and sustainable supply of raw sugarcane.

The measures would also create a more conducive environment for both farmers and the sugar industry, while improvements in industrial efficiency could enable mills to keep sugarcane cultivation profitable and ensure that incentives remain appropriately aligned throughout the value chain, he concluded.

Copyright Business Recorder, 2026