No subsidy or tax relief on imports: ECC sticks to sugar deregulation
The Finance Ministry communicated this clearly on financial position and commitments with the International Monetary Fund (IMF).
On June 27, 2025, the Ministry of National Food Security and Research (MNFS&R) sought emergency approval from the ECC Chairman and Finance Minister Senator Muhammad Aurangzeb to present a summary due to urgent market concerns. Approval was granted.
De-regulating the sugar industry: do not drop the ball again
The MNFS&R briefed the ECC that a meeting of the Prime Minister's Committee, formed on March 16, 2025 under the Deputy Prime Minister, was held on June 19. The committee noted that sugar prices remain high, and current stock levels are inadequate to stabilize the market.
The committee concluded that demand-pull inflation in the sugar market could only be mitigated by increasing supply. Despite multiple appeals, the sugar industry has refused to reduce ex-mill prices to the agreed range of Rs.154–159/kg. As a result, the committee recommended importing up to 500,000 metric tons (0.500 MMT) of white sugar.
A subsequent Sugar Advisory Board (SAB) meeting on June 23 reviewed stock levels, reported at 2.575 MMT, and evaluated consumption trends. The average monthly consumption, net of exports since the start of the crushing season (November 21, 2024), is 0.541 MMT — a level that may only just meet domestic demand through the next season, leaving no surplus stock for FY 2025-26.
Consultations with sugar dealers and federal and provincial agencies reveal tight supply and rising demand, enabling hoarding and profiteering. Projections suggest sugar prices could climb to Rs.190/kg ex-mill and Rs.200/kg at retail by November 2025.
To curb the ongoing price surge, the MNFS&R proposed importing white sugar and requested the federal government provide duty and tax relief on imports until September 30, 2025.
A Steering Committee was proposed to manage import logistics, price setting, and distribution, including Federal Minister for MNFSR (Chairman), Federal Minister for Commerce, Special Assistant to the Prime Minister (Foreign Affairs), Secretaries of Finance, Commerce, MNFSR, and Industries, the FBR Chairman, Chief Secretaries of all provinces and Chairman of the Trading Corporation of Pakistan (TCP).
The committee will determine the import quantity and procurement methods, including government-to-government (G2G) deals, private importers, or via the TCP.
The TCP has provided cost estimates both inclusive and exclusive of duties/taxes for an import volume of 100,000 MT (+/- 5%).
Following the presentation, MNFSR formally requested the ECC's approval for importing up to 0.500 MMT of white sugar through this mechanism.
However, the Finance Division emphasized that no subsidy is allocated for sugar imports in the FY 2025-26 budget and IMF conditions prevent any waiver of duties or taxes. The ECC reiterated its earlier directive to deregulate sugar prices, noting that any import proposal must include detailed financial implications for ECC approval.
After a thorough discussion, the ECC approved the formation of the Steering Committee, which will submit detailed recommendations and financial evaluations for final decision-making.
Copyright Business Recorder, 2025
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
3 minutes ago
- Business Recorder
PMI streamlines local operations: PMPKL takes steps to delist from PSX
KARACHI: Philip Morris (Pakistan) Limited (PMPKL), the local arm of global tobacco giant Philip Morris International (PMI), has formally taken steps to delist from the Pakistan Stock Exchange (PSX), signaling a major shift in its corporate strategy. The move, aimed at consolidating operations and enhancing group-level efficiency, has reached a critical stage with the company's buyback offer now disclosed in line with voluntary delisting requirements. In a notice issued to the Pakistan Stock Exchange, PMPKL reiterated that the delisting proposal was first approved by its Board of Directors at a meeting held on March 25, 2025, in Karachi. Under Rule 5.14 of the PSX Voluntary Delisting Rules, the board resolved to initiate the delisting process. As part of this transition, Philip Morris Investments B.V., the company's majority shareholder and sponsor, has committed to buying back 1,444,931 shares from minority shareholders at the price of Rs 1300 per share. Philip Morris Brands SARL, the co-sponsor, will retain its shareholding in the now private entity. This move marks a significant milestone in the journey of PMPKL, which originally entered the Pakistani market by acquiring Lakson Tobacco Company Limited, subsequently rebranding to its current identity on February 25, 2011. The company is engaged in the manufacture and sale of cigarettes and tobacco products, and has operated under the banner of one of the world's leading tobacco firms. Analysts noted that the intended delisting reflects a broader trend among multinational entities reassessing the viability and regulatory landscape of public listing in emerging markets. The move, once completed, will make Philip Morris Pakistan a privately held company again — allowing its sponsors more direct operational control in a challenging regulatory and fiscal environment. Market observers view the step as part of a global realignment by PMI to optimize capital structures and reduce reporting burdens across its emerging market entities. Copyright Business Recorder, 2025
Business Recorder
2 hours ago
- Business Recorder
Rs80m for Shehbaz Road Sewerage Line approved
LAHORE: The Punjab government has approved funding of Rs 80 million for the Shehbaz Road Sewerage Line project, and a tender for the project will be issued in August. This was disclosed during a meeting of the Water and Sanitation Authority (WASA) chaired by its Vice Chairman Chaudhry Shahbaz Ahmed on Thursday. A detailed discussion also took place regarding various aspects of the Shehbaz Road Sewerage Line project. The project will involve laying a new sewerage line approximately 5,000 feet long, using pipelines with diameters of 36 inches and 24 inches. The neighbourhoods of Bhagatpura, Yathrib Colony, Elahi Town and other adjacent areas will benefit from this development. On this occasion, the Vice Chairman directed the officials present in the meeting to begin the work on the project immediately after the monsoon season. He also emphasised that the local population should be informed in advance to minimise any inconvenience during the construction phase. Copyright Business Recorder, 2025
Business Recorder
2 hours ago
- Business Recorder
Govt mulling asking CCP to take action against vanaspati makers?
ISLAMABAD: The government is likely to direct the Competition Commission of Pakistan (CCP) to take action against vanaspati manufactures on suspension of collusive behaviour as the industry has not passed on the reduction in prices of commodity to the consumers, sources in Commerce Ministry told Business Recorder. On March 13, 2025, during discussion on presentation on status of availability and price fluctuation of vegetable ghee/ cooking oil, the Economic Coordination Committee (ECC) of the Cabinet directed that the Ministry of Industries and Production to present the status of availability and prices variation of the commodity in the next meeting of the ECC, given the rising price trend of vegetable oil. In this regard, the MoI&P held two meetings with Pakistan Vanaspati Manufacturers Association (PVMA) in April and May 2025 for deliberations. 'Anti-competitive practices'; CAT upholds Rs50mn fine on Vanaspati Manufacturers Association The data available with Pakistan Bureau of Statistics (PBS), Federal Board of Revenue (FBR) and Ministry of National Food Security and Research was also consulted. According to sources, it was observed that since early December, 2024, there had been a 24% decline in the international price of palm oil, whereas the price of cooking oil in the local market is still higher by 4.5% compared to the peak in international prices. An overview of Pakistan's Ghee sector suggested that import and marketing of edible oil and ghee is not regulated. PVMA is a registered association with 148 members and 450 licenced brands of ghee and oil. Market share of imported oil and oil seeds is 89% (3.842 Million MT) while locally produced-oil seeds have a share of 11% i.e., (0.474 Million MT) only. Total requirement of edible oil in Pakistan is around 4.2 to 4.3 million MT. Pakistan is the third largest importer of oil and oil seeds in the world and imported around 88% of palm oil/olein from Indonesia and around 11%imports from Malaysia. Furthermore, soft oils i.e., Soybean, Sunflower, Canola are imported from Argentina, Brazil, United States, Ukraine etc. PVMA maintained that current stocks of around 375,000 MT of palm oil and olein are available at ports, which are sufficient for one month. Furthermore, ships are arriving on regular basis. Regarding price, the PVMA revealed that it was a wrong perception that local edible oil or ghee market is closed and monopolistic as more than 148 manufacturers are registered with PVMA. Consequently, due to intense competition, it is not possible for a seller to sell at a higher price. The prices will further fall when the cheaper Palm oil/olein reaches ports within around two and half months. Moreover, due to new trade policy introduced by US, there is a recession in palm oil and olein market. The sources said that ample stocks are available in the country. However, the impact of international prices is generally transferred to local market after two months when the imported raw materials reach Pakistan. The impact of decreasing international prices in the month of December, 2024, was not transferred to general public despite lapse of more than two months. 'The Competition Commission of Pakistan should take necessary action to ensure no cartelisation in oil and ghee sector and provincial governments should vigilantly monitor the prices of different tier brands,' the sources continued. Copyright Business Recorder, 2025
