AsiaNet-Pakistan Premier Editorial Content and Press Release Distribution Service
ISLAMABAD: Business leaders have called for a transparent and time-bound investigation into the activities of the sugar mills cartel, accusing it of price manipulation and strategic hoarding that drain billions from consumers and weaken the economy.
At a recent meeting, these leaders argued that the surge in sugar prices to nearly Rs 200 per kilogram is not due to market forces but rather a deliberate scheme orchestrated by mill owners. Independent estimates suggest that the cartel’s annual windfall is around Rs 300 billion, while the broader economic impact is assessed at Rs 610 billion, equating to 1.22 percent of Pakistan’s GDP.
Shahid Rasheed Butt, former president of the Islamabad Chamber of Commerce and Industry, stated that despite producing approximately 6.8 million tonnes of sugar in 2024-25, nearly matching the national consumption, the industry allegedly created artificial shortages. This manipulation is said to push prices higher and justify export strategies that favour millers over consumers and farmers.
Butt urged authorities to recover illicit profits and impose strict penalties on those responsible, warning that without enforcement, profiteering will continue. He highlighted that the cartel’s unchecked dominance is straining household budgets and distorting agriculture by displacing cotton cultivation with sugarcane farming.
This shift has reportedly driven down cotton arrivals by 34 percent, from 8.4 million bales to 5.5 million in 2025, impacting the textile sector, a major urban employer and top export earner. Textile producers face higher costs as they are forced to import cotton due to domestic supply shortages, eroding global competitiveness.
Butt also criticized export policies allowing mills to sell sugar abroad at higher prices than domestic rates while avoiding sales tax on exports. Exporters have allegedly withheld stocks until approvals were granted, exacerbating shortages and driving up local prices.
He called for robust legal reforms, emphasizing that the powerful sugar sector suffers from lax oversight, enabling cartelisation over decades. Butt stressed the need for laws that criminalize profiteering and dismantle the networks sustaining it.
With the government considering the import of 100,000 tonnes of sugar to ease shortages, Butt remarked that the crisis highlights the urgent need for structural reforms. He warned that unless the cartel’s grip is broken, Pakistan’s economy will remain hostage to a few vested interests.