ISLAMABAD: A National Assembly committee, chaired by PTI’s Atif Khan, on Monday sought details from the Securities and Exchange Commission of Pakistan (SECP) regarding directors of sugar mills holding at least 20% shareholding. The move follows reports of approximately Rs 300 billion in profits allegedly made through price manipulation in collusion with sugar dealers.
Officials from the Federal Board of Revenue (FBR) told the committee that 14 of its officials have been suspended and are under investigation for their suspected role in the illegal release of sugar stocks.
The Additional Secretary of the Ministry of Industries and Production Asif Saeed Khan Lughmani revealed that sugar millers and dealers had capitalized on the expiration of the sugar export deadline, earning an estimated $440 million from exports.
He noted a 1.11% increase in sugarcane cultivation in the 2024–25 crop year compared to the previous year. However, adverse climate conditions — including heatwaves and crop diseases — led to a drop in yield and sucrose recovery, reducing overall sugar production to 5.862 Million Metric Tons (MMT), nearly 1 MMT less than the previous year. Including carryover stocks of 0.5 MMT, the total sugar availability for the year was pegged at 6.362 MMT — just enough to meet domestic consumption.
“This tight supply-demand balance allowed the industry to raise prices from January 2024 onward, after the exports,” the secretary explained.
Efforts to stabilize prices included several high-level meetings led by the Deputy Prime Minister with the Pakistan Sugar Mills Association (PSMA). It was agreed to cap ex-mill prices at Rs 159/kg and retail at Rs 164/kg until April 19, 2025. However, the PSMA reportedly violated this agreement, prompting the ministry to issue warnings — which were ignored.
The FBR, which introduced a track-and-trace system in November 2021 to monitor sugar distribution, disclosed that some sugar bags were released without the required scannable stamps. This breach allegedly involved FBR staff stationed at sugar mills. Several trucks carrying unstamped sacks have been seized. Sugar is taxed at 18% GST, equating to Rs 1,485 per 50kg bag.
The Prime Minister has since formed a special oversight team, including intelligence personnel, to monitor FBR operations. Despite lower production, sugar-related sales tax revenue rose to Rs 100 billion from Rs 65 billion last year.
“We may not need to import sugar. Current stocks can meet demand until November 15, 2025,” said the Additional Secretary. If needed, only about 200,000 tons of sugar may be imported. Notably, 70% of sugar consumption is industrial, not domestic.
The Ministry of National Food Security confirmed plans to import sugar if required, to curb price hikes and prevent artificial shortages — especially amid concerns of a surge in prices around November.
The committee also resolved to summon SECP officials to obtain a list of sugar mill directors with significant shareholding, which will be made public to identify any political affiliations. Additionally, the panel will examine Public Accounts Committee records, where the Auditor General alleged sugar millers earned Rs 300 billion in profits within just three weeks.
Panel chairman Atif Khan remarked that many sugar mill owners are closely linked to powerful political families.
