The latest IMF Technical Assistance Report has revealed how Pakistan’s sugar sector is dominated by powerful cartels. These industry groups have profited for decades at the expense of consumers.
According to the IMF, sugar mill owners have benefited from favorable government policies, subsidies, and regulatory loopholes. These measures allowed the sector to remain profitable while undermining market competitiveness.
The report highlights that mill owners were protected through “recommended” sugarcane prices and high import tariffs. These protections guaranteed profits regardless of actual market conditions.
Export and pricing policies have also favored the industry repeatedly. In 2018-19, the government approved large sugar exports and even subsidized them, despite sufficient domestic stock. This resulted in nationwide shortages and sharp price increases for consumers.
Investigations by the FIA uncovered collusion among major sugar mill owners. The inquiry found evidence of artificial shortages, price manipulation, speculative hoarding, fraudulent accounting, and laundering of illicit profits.
The IMF report identified several political figures as beneficiaries of these schemes. Government-approved export pushes played a central role in inflating domestic prices and enriching select industry groups.
Despite these findings, the IMF notes that accountability in Pakistan’s sugar sector has remained limited. While occasional arrests and new regulations have occurred, the underlying cartel structure persists.
The IMF emphasizes the need for stronger regulatory oversight, transparent policies, and enforcement mechanisms. Such measures are critical to protect consumers, ensure fair competition, and restore integrity in Pakistan’s sugar industry.
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The report signals that meaningful reforms, combined with strict monitoring, are necessary to prevent future price manipulation and profit hoarding. Pakistan’s sugar market, the IMF warns, will remain vulnerable without sustained intervention.
