PSMA urges Pakistan govt to deregulate sugar industry

Business Recorder

5 days ago

LAHORE: The Pakistan Sugar Mills Association (PSMA) has urged the government to completely deregulate the industry.
In a statement, a spokesman for the PSMA said the Association made this request during a general body meeting held today. It requested the federal government to consider deregulating the sugar sector, as has already been done by the provinces in the case of sugarcane.
It said the sugar industry is the second largest agro-based industry in Pakistan after textiles. During the crushing season, it generates direct and indirect business activity worth Rs. 1,000 billion in agriculture, transport, allied industries, wholesale, and retail markets. It pays approximately Rs. 225 billion in direct and indirect taxes to federal, provincial, and local governments, and provides $4 billion worth of import substitution to the national economy.
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The industry utilizes indigenous energy by using bagasse, through which an allied steel industry has also been established. The generated power is exported to the national grid as well. With conducive policy interventions, an industrial chain using by-products of sugarcane could emerge, as has happened in many other countries.
The use of ethanol in vehicles as fuel—similar to Brazil and India—could strengthen our national energy mix, which is heavily dependent on imported petroleum products. The Ethanol Blending Policy, formulated in Pakistan in 2009 and later discontinued, needs to be revived. The current potential of bio-ethanol is sufficient to replace 7% of the country's total gasoline consumption.
Two very important agro-based sectors— rice and maize— are already deregulated, with rice exports alone fetching nearly $5 billion. There are no restrictions on the import and export of rice and maize in Pakistan. Both sectors operate on free-market principles and are functioning efficiently. Rice and maize growers receive international prices, which has encouraged investment in research and development, resulting in improved yields.
In contrast, scant efforts have been made in Pakistan to develop new sugarcane varieties for improving yield and sucrose recovery.
The government should adopt a permanent policy for the deregulation of the sugar sector so that it can continue contributing to the national economy through import substitution, increased business activity, employment generation, tax revenue, and substantial foreign exchange earnings from regular exports of surplus sugar.
The sugar industry has advocated for deregulation in several meetings with the government, including the most recent Sugar Advisory Board meeting held on July 17, 2025. The formation of a committee by the federal government on the deregulation of the sugar sector is a welcome step, and it is hoped that—like other agricultural sectors—the sugar industry will be given the opportunity to realize its full potential for national development.
Copyright Business Recorder, 2025