Pakistan’s sugar exports raise shortage, inflation fears

Pakistan's recent permission for sugar exports has sparked worries about potential domestic price spikes and supply shortages. The PakistanSugar Mills Association (PSMA) reported a surplus of about 1.03 million tonnes and requested export of one million tonnes. The Economic Coordination Committee (ECC) initially allowed 200,000 tonnes in September, with the federal cabinet confirming this decision.

The State Bank of Pakistan then issued export guidelines on October 2 and adjusted mill-specific quotas on October 13. However, economists and consumer advocates caution that depending on the industry's export projections may repeat last year's issues. Last year, the government permitted export of 750,000 tonnes, causing retail sugar prices to soar to Rs 180-200 per kilogramme.

Authorities had to import 300,000 tonnes at higher international prices to stabilize the market. The industry's actions have also been under regulatory watch. In November 2020, the Competition Commission of Pakistan (CCP) issued show-cause notices to PSMA and 84 mills for alleged anti-competitive practices. In November 2025, the CCP sent notices to ten Punjab mills for allegedly coordinating to delay crushing and cap sugarcane prices at Rs 400 per maund.

Sugar is vital for households, bakeries, and food manufacturers, so any supply miscalculation could burden local consumers and farmers again. As the new crushing season begins, the government's ability to prevent private export gains from becoming a public economic issue will be crucial.