At the end of 2024, the federal government negotiated a new IMF agreement; On the other hand, Pakistan ended the minimum support price. It was expected to have huge consequences, especially for the wheat and sugar industry. Today in the National Assembly’s Standing Committee on Food Safety, these consequences were felt.
Federal minister Rana Tanveer Hussain explained that sugar production last year was 7.6 million tonnes, while domestic demand was 6.3 million tons, leaving a profit of 1.3 million tonnes, which had adversely affected the industry. This year, sugar production was estimated at 7.2 million tonnes, but actual production remained 5.8 million tons.
“The government has reduced sugar prices from RS 210 per kg and no supplementation was made for sugar exports.” Without the support price, the profits only injured the farmer.
Committee member Rana Hayat called on authorities to provide some protection to farmers in the future. Officials from the Ministry of Food Safety noted that wheat prices had risen due to flooding, but are now under control. Rana Hayat questioned why sugar prices were not regulated in a similar way, warning that imports of sugar into the crushing season could hurt farmers.
Rana Tanveer Hussain added that sugar cane production last year fell 1 million tons below the target. “We allowed surplus sugar exports, which earned $ 450 million in currency. Now we import sugar worth $ 150 million and the price increase was caused by the mafia,” he said. He also mentioned that a bumper sugar cane crop is expected this year.
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The Minister also emphasized that wheat production has fallen due to the absence of support prices and a further fall is expected this year. The government has decided to consult the IMF to recover prices for wheat support and tries to convince the IMF to facilitate food restrictions.
Rana Tanveer Hussain said that reduced government control has caused wheat prices to rise in the market. A new wheat policy is expected to be implemented from the first week of October with the aim of protecting both farmers and consumers.
“If wheat production falls by another 6 percent this year, Pakistan may need to import wheat worth $ 1.5 billion, which would put a significant burden on the national treasury.”
Wheat production suffered tremendously when the support price ended, which was already low with MSP not available, and now the wheat supply has reached dangerous low levels with the floods.
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This year, sugar prices saw a recent increase due to mafia influence. Authorities have consistently blamed the steep prices for alleged coordination among influential actors in the sugar sector, often referred to as the “sugar mafia”, which is accused of storing and manipulating the supply to inflate prices. In response to the crisis, the federal government had previously announced a temporary removal of import duties on sugar in an attempt to reduce domestic prices.
The Wholesale Association has consistently criticized the import -based approach and instead urged the government to take strong action against hamsters. They have called for warehouse inspections and crashes on illegal storage and argue that such enforcement could significantly reduce sugar prices in the local market.
