The government has yet to implement reforms in the sugar sector, raising concerns as the IMF March 2026 deadline nears.
Official sources said provincial governments have not passed the necessary legislation, despite repeated requests from the Ministry of Industries and Production. Without these laws, the deregulation of the sugar sector cannot proceed.
Proposed Deregulation Measures
Under the proposed framework, farmers will have the freedom to decide whether to cultivate sugarcane. They can also sell sugarcane to any mill across the country without zoning or territorial restrictions.
The plan includes lifting controls on sugar exports and removing tariffs or bans on imports. Restrictions on raw materials used in sugar production will also be eliminated.
IMF Commitments
As part of Pakistan’s IMF program, the government is required to begin sugar sector deregulation by March 2026. The federal government aims to fully exit the sector by June 2026 after achieving agreed benchmarks.
Proposals for reform have been discussed since October 2025, but progress has been minimal. The federal government has formally written to provincial authorities to pass enabling legislation. Punjab, Sindh, and Khyber Pakhtunkhwa have acknowledged the letters and referred them to relevant departments.
Additional Safeguards
To maintain crop quality, authorities plan to issue a negative list of harmful sugarcane varieties. Once deregulation is implemented, restrictions on opening new sugar mills will also be removed nationwide.
Sources warned that the lack of provincial legislation is a major hurdle in meeting IMF commitments. Delays in reform could complicate Pakistan’s broader economic and sectoral reforms.
In other related news also read End of Price Controls: Big Shake-Up in Sugar Sector
Officials emphasized that timely action by provinces is crucial to ensure a smooth transition to a deregulated sugar sector and compliance with IMF requirements.
