Govt to fully 'deregulate sugar sector by June 2026' under IMF agreement
Move aims to hand the entire sugar economy, from farms to mills and markets, over to market forces
January 08, 2026
- Government to abolish price controls on sugar and sugarcane.
- Restrictions on setting up new sugar mills to be removed.
- Zoning restrictions on sugarcane cultivation to be removed.
ISLAMABAD: Pakistan has pledged to the International Monetary Fund that it will completely liberalise its sugar industry by the end of June 2026, bringing an end to long-standing state oversight of pricing, output, and trade, The News reported on Thursday citing sources.
The move aims to hand the entire sugar economy, from farms to mills and markets, over to market forces, similar to recent steps taken in the wheat sector. Under the plan, the government will abolish price controls on sugar and sugarcane, remove restrictions on setting up new sugar mills and lift limits on imports and exports.
A long-standing ban on issuing licences for new sugar mills will also be withdrawn, opening the sector to fresh investment.
Officials said zoning restrictions on sugarcane cultivation will be removed, giving farmers complete freedom to grow cane wherever they choose. The government will also end controls on how sugarcane is used or sold. Farmers will be free to sell their crop to any mill of their choice or use it for making jaggery (Gur).
Import duties on sugar will be reduced, exports will be liberalised and export quotas for sugar mills will be scrapped. Mills will also be allowed to import raw sugar for processing and re-export, and to freely process sugarcane or imported raw material without official approvals.
Most importantly, the government will stop fixing sugarcane and sugar prices. Instead, prices will be set by supply and demand in the market. The plan also bars any formal or informal collusion by industry groups to influence ex-mill sugar prices.
The proposed framework clearly states that the government will not provide any subsidy on sugar exports in the future. Officials said this step is meant to reduce fiscal pressure and curb policy-driven market distortions that have often led to shortages or sudden price hikes.
To protect farmers from losses, the government plans to issue a list of banned sugarcane varieties before each sowing season. These varieties typically have low recovery rates and can hurt farmers’ earnings.
