The Competition Commission of Pakistan (CCP) has issued notices to ten Punjab-based sugar mills for allegedly forming a cartel to delay the start of sugarcane crushing and fixing the purchase price of sugarcane at Rs400. per
CCP Chairman Dr. Kabir Ahmed Sidhu said that no commercial organization or trade association should be used as a platform for secret decision-making. He warned that strict action would be taken against any entity involved in anti-competitive practices.
According to the CCP, representatives of the ten mills met at Fatima Sugar Mills on November 10 where they reportedly agreed to begin crushing on November 28 and fix a uniform sugarcane price of Rs 400. per 40 kg. The meeting was chaired by Fatima Sugar Mills Resident Director Rana Jamil Ahmed Shahid.
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Representatives of Sheikho Sugar Mills, Thal Industries Corporation, Tandlianwala Sugar Mills (Rehman Hajra Unit), JK One Sugar Mills, Ashraf Sugar Mills and Kashmir Sugar Mills attended the meeting in person. Delegates from Siraj Sugar Mills, Two Star Sugar Mills and Haq Bahoo Sugar Mills joined online.
The CCP said any agreement to fix prices or coordinate other business decisions violates Section 4 of the Competition Act, 2010. Punjab’s sugarcane commissioner had earlier ordered the mills to start crushing from November 15.
The commission also noted a power imbalance between mills and farmers in price negotiations. It said individual millers should set sugarcane prices in consultation with local grower representatives, based on supply and demand, rather than collectively setting a uniform price.
The millers have been asked to submit a written explanation within 14 days to justify why proceedings should not be initiated for allegedly entering into prohibited agreements, manipulating the sugarcane market and securing an unfair commercial advantage by delaying crushing.
The CCP warned that delays in early season cane procurement could disrupt supplies and contribute to higher retail sugar prices.
The CCP noted that entering into agreements to fix prices or take other business decisions in any market is against Section 4 of the Competition Act 2010. The Punjab Sugarcane Commissioner had earlier directed the sugar mills to start crushing from November 15.
The commission highlighted a clear balance of power between mill owners and farmers in the price negotiations. Ideally, each mill should set cane prices in consultation with local farmer representatives, taking into account supply and demand. Instead, the mills have allegedly entered into a collaboration to unilaterally fix the price at Rs 400 per 40 kg.
The CCP has asked the millers to submit a written response within 14 days explaining why legal action should not be taken against them for engaging in prohibited agreements, manipulating the sugarcane market and obtaining unfair commercial advantages through delayed crushing.
Delays in cane crushing early in the season can affect sugar supply in the market, potentially creating artificial shortages and increasing retail sugar prices.
