Lahore: Sugar mills across Pakistan have halted supply to the market, intensifying an already unstable situation as the federal government has yet to finalize sugar pricing, despite a missed April 20 deadline agreed upon with the Pakistan Sugar Mills Association (PSMA), reported The News.
The delay in reaching a decision follows last month’s government-imposed price cap on sugar, a move mills reportedly responded to by cutting off supply. The resulting shortage has pushed sugar prices up, with wholesale dealers warning of nearly depleted stocks.
Dealers say the market price for a 100kg bag of sugar has climbed to Rs 16,200, compared to the government’s fixed price of Rs 15,900 set on March 19. They note that no new pricing has been established, despite reports that mill owners were expected to meet on April 22. Many now anticipate a rise in prices by Rs 2 to 3 per kilogram in the coming days.
A senior PSMA official confirmed that no progress has been made since Deputy Prime Minister Ishaq Dar’s announcement last month about revising prices. Meanwhile, some sources accuse sugar mills, particularly those linked to large operators in South Punjab, of manipulating supply and pricing, while government authorities remain passive.
Wholesale dealers say the price cap has led mills to stop selling sugar for the past month. As they offload their remaining inventory, they warn that mills appear to be dominating the market unchallenged, benefiting from the situation while dealers face shortages and consumers bear rising costs.
Zaka Ashraf, the newly-appointed PSMA chairman, dismissed concerns over the supply gap and rising prices. He said mills are operating below cost and that buyers are still collecting sugar from those who had previously purchased it.
However, an official from the Federal Ministry of Industries and Production offered a different explanation. He pointed to the Federal Board of Revenue’s (FBR) introduction of a minimum price for sales tax purposes, which may have disrupted the market temporarily. The change, he said, created confusion for dealers who bought sugar earlier at lower rates and are now unsure who should cover the increased tax burden—themselves or the mills.
As the standoff continues, market watchers worry the lack of government action will further hurt consumers and deepen the sugar crisis in the country.
