Finance Minister Announces Deregulation of Sugar Sector

Finance Minister Muhammad Aurangzeb announced on Monday that the government would fully deregulate the sugar sector. He stated this while chairing a meeting on sugar sector in which the chairman Competition Commission of Pakistan (CCP) Chairman Dr Kabir Ahmed Sindhu briefed about ongoing and past sugar crisis. The CCP disclosed that inaccurate estimates by the Sugar Advisory Board were a key factor behind the current sugar crisis in the country. According to Dr. Sindhu, sugar mills provided incorrect data on available sugar stocks and sugarcane production to the Advisory Board and the Sugar Advisory Board failed to provide accurate data regarding sugarcane production, available stocks, and sugar output between June and October last year. Based on these flawed projections, the government had allowed sugar exports, which ultimately led to domestic shortages. “The crisis was avoidable. The decision-making process should not rely solely on data provided by the Sugar Mills Association,” said Dr. Sidhu, emphasizing the need for independent and transparent data collection. The CCP is currently preparing proposals to support the Sugar Sector Reform Committee and shared findings from previous sugar crises specifically those of 2008-09, 2015-16, and 2019-20 during the briefing. It was noted that in each of these cases, exports had been allowed despite a limited domestic supply, contributing to artificial shortages. The Commission also highlighted its past actions against cartelization in the sugar industry. Orders were issued against the sugar cartel in both 2010 and 2021. Notably, the 2009-10 inquiry had revealed clear evidence of cartel behavior, but the decision from that case was never made public. Legal challenges, including a stay order by the Sindh High Court, delayed proceedings until 2021. The matter is currently pending before the Supreme Court. The minister said that once deregulated, the role of the Competition Commission will become even more crucial. He also directed that the CCP be given full support from other institutions, especially in accessing reliable data to aid investigations and reforms. Senator Aurangzeb assured full government support to the CCP for expediting court proceedings of pending cases and enhancing the institution’s operational capacity. He reaffirmed that a robust competition framework is essential for protecting consumer interests, ensuring market transparency, and sustaining economic growth. The meeting also reviewed pending litigation, examined administrative and regulatory measures to stabilize the sugar market, and discussed proposals to strengthen CCP’s institutional capacity to promote economic efficiency, protect consumers, and ensure a transparent, competitive business environment.