The Pakistan government is facing challenges in convincing sugar millers to reduce sugar prices before the start of Ramazan. Despite ongoing discussions, millers are not ready to lower prices, creating concerns for consumers during the holy month.
Currently, sugar is being sold at Rs155 per kg, but the government is aiming to bring the price down to Rs120 per kg to provide relief to the public. However, sugar mill owners argue that the actual cost of sugar is Rs170 per kg, making it difficult for them to sell at lower prices.
Sugar Millers Demand Tax Removal:
One of the main demands of sugar millers is the removal of the 18% General Sales Tax (GST) on sugar. According to them, eliminating this tax is the only way to reduce prices by Rs25 per kg.
Most of the sugar mill owners are currently in Dubai, and the government has asked them to make a final decision by Friday regarding sugar prices.
No Fixed Support Price for Sugarcane:
Adding to the issue, provincial governments have not set a support price for sugarcane this year. This decision was influenced by the International Monetary Fund (IMF), which advised against fixing the price. The absence of a support price has created uncertainty in the sugar industry, making it harder for the government to control market rates.
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Massive Increase in Sugar Exports to Afghanistan:
At the same time, Pakistan’s sugar exports to Afghanistan have surged significantly. In the first seven months of FY 2024-25, sugar exports to Afghanistan increased by a staggering 4332%.
According to official reports, from July to January, Pakistan’s sugar exports to Afghanistan reached $262.68 million, compared to only $5.93 million in the same period last year. This means sugar exports rose by $256.76 million Year-Over-Year (YOY).
This massive rise in exports has made sugar the top export commodity from Pakistan to Afghanistan.
Will the Government Succeed?
With Ramazan approaching, the government is under immense pressure to control sugar prices and provide relief to consumers. However, with millers standing firm on their price calculations and demanding tax cuts, the outcome remains uncertain.
If the government fails to negotiate a solution, sugar prices may continue to rise, affecting millions of people across the country during the holy month.
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