ISLAMABAD (Big Digit) Government of Pakistan issues letter of credit for sugar import

ISLAMABAD (Big Digit) The government has taken steps to meet the demand for sugar in the country and bring stability in prices and in this regard has issued letters of credit for the import of 85 thousand metric tons of sugar. According to the Ministry of Food Security, after opening all the LCs, the shipment was made through the relevant banks. Under the trade agreement with SOCAR, the sugar consignment will be delivered to Pakistan in phases. The first consignment of sugar is expected to reach the port in the next few weeks.

Ministry of Food Security, Government of Pakistan, has established Letters of Credit (LCs) through SOCAR for the import of 85,000 metric tons of sugar to meet the demand for sugar in the country and to stabilize prices. The government has taken this step to increase domestic sugar reserves and protect against any possible shortage or unusual fluctuations in prices in the future. All these LCs have been officially opened and disbursed through the relevant banks. Under the trade agreement signed with SOCAR, this consignment of sugar will be delivered to Pakistan in phases. The first consignment is expected to reach the port in the next few weeks. Under the project, imported sugar will be delivered to the public at concessional rates in the open market. The import of 85,000 metric tons of sugar will maintain the continuity of supply in the market. It will be ensured that the imported sugar meets the international quality requirements and reaches Pakistan within the stipulated time. It may be recalled that on July 10, 2025, the federal government had imposed an immediate import ban to stabilize sugar prices. The strategy was announced, under which the import of 350,000 metric tons of white sugar was approved in two phases. All import duties and taxes were abolished under this decision. This decision was taken in a meeting of the Steering Committee on Sugar Imports chaired by Federal Minister for National Food Security Rana Tanveer Hussain. Under the plan, the first tender was immediately issued for 200,000 tons of sugar. The second tender was issued a week later for 150,000 tons of sugar. The Federal Board of Revenue (FBR) has reduced the sales tax on imported sugar from 18 percent to 0.25 percent and has also completely abolished the 3 percent value-added tax. This facility will be available to both the Trading Corporation of Pakistan and private importers till September 30, 2025. The decision comes after the federal cabinet approved the import of 500,000 tons of sugar on July 4. Interestingly, just a few months ago, the government had allowed the export of 750,000 tonnes of sugar from June 2024 to January 2025. The Ministry of Commerce was not involved in these decisions, which was criticized by various quarters. The Pakistan Sugar Mills Association opposed the import move, arguing that the country had adequate sugar stocks to meet demand until November 21, 2025. The retail price of sugar in the open market has reached Rs 195 to 210 per kg, while according to official data, the average price per kg was Rs 185 in the week ending July 3. Last year, the price of sugar in the same week was Rs 144.7 per kg. Earlier, on June 23, 2025, the Sugar Advisory Board had approved the import of 500,000 tonnes of sugar to control the shortage and price hike in the country. The decision was taken in a meeting chaired by Federal Minister for Food Security and Research Rana Tanveer Hussain, in which senior officials of the ministry and representatives of other concerned institutions participated. The meeting discussed in detail the current situation of sugar in the country, price hike and possible hoarding by sugar mills. Federal Minister Rana Tanveer Hussain had said on the occasion that the people are being severely affected by the rising prices of sugar, hence immediate steps are essential. The board directed to ensure the supply of imported sugar with strict supervision so that there is no illegal profiteering. This decision by the government was taken at a time when the price of sugar in different parts of the country had crossed Rs 150 per kg and common consumers were worried about the availability of this basic necessity. In this context, this step of the government was part of an effort to provide immediate relief to the people, however, it remains to be seen whether this imported sugar will actually reach the consumers at the fixed price or not.Recall that last year, on August 13, 2024, the Sugar Advisory Board meeting recommended exporting 40,000 metric tons of sugar to Tajikistan. According to the announcement, the availability and prices of sugar stocks in the country were reviewed. The export of sugar to Tajikistan will be at the government-to-government level. The announcement said that it was decided to separate the retail price of sugar from the export, and the retail price has nothing to do with the Sugar Mills Association. Industries Minister Rana Tanveer Hussain had said that the remaining sugarcane farmers would be paid arrears by the sugar mill owners soon. The district administration will control the retail price of sugar. The meeting was briefed that there is a stock of 2.8 million metric tons of sugar in the country, and there is a sugar surplus. The price of sugar is continuously increasing across the country. It should be remembered that a year ago, the retail price of sugar was Rs 140 per kilogram, while the price of a 50-kilogram bag of sugar in the markets was Rs 6,200. Now the retail price per kilogram has increased to Rs 185 to 190. The government had allowed the export of sugar after assurances from sugar mill owners that prices would not increase. However, there was a significant increase in sugar prices, on which the government took action and said that the ex-mill rate of sugar would be Rs 159 while the retail price would be Rs 164 per kilogram. In the past, during the inquiry into the sugar crisis, NAB had compiled a report with the names of sugar mills and their owners and other details, according to which the country’s big politicians are the owners of sugar mills. The Sharif family and their relatives own 6 sugar mills, including Hamza Sugar Mills, Ramzan Sugar Mills, H. Waqas Sugar Mills and Ittefaq Sugar Mills are included. Other relatives of Nawaz Sharif own Abdullah Sugar Mills, Chinar Sugar Mills, Chaudhry Sugar Mills, Kashmir Sugar Mills and Yousaf Sugar Mills. President Asif Ali Zardari and his relatives own 6 sugar mills. These include Ansari Sugar Mills, Skrand Sugar Mills, Kiran Sugar Mills. While Asif Ali Zardari’s close aide and former PCB chairman Zaka Ashraf also owns Ashraf Sugar Mills. PML-Q chief Chaudhry Shujaat Hussain also owns Punjab Sugar Mills.

GDA’s Fehmida Mirza owns Mirza Sugar Mills and Panjrio Sugar Mills. Jahangir Khan Tareen also owns 3 sugar mills DW1, W2 Sugar Mills and Gulf Sugar Mills, while Chaudhry Pervez Ashraf and Khusro Bakhtiar are also partners in Rahim Yar Khan Sugar Mills. Former Senator Haroon Akhtar and his partners own Kamalia Sugar Mills, Tandlianwala Sugar Mills, Wala Miran Sugar Mills and Layyah Sugar Mills.The important thing is that Pakistan has often ranked fifth in the world in terms of sugarcane production. Its average sugarcane production per acre is 500 maunds, sometimes 1000 and 1200 maunds, while the world average production per acre is much more than 600 maunds. In Indian Punjab, which is connected to Pakistani Punjab, every production, except sugarcane per acre, is much higher than Pakistan. In Pakistan, farmers are being paid Rs 600 to 700 per maund of sugarcane and the rates are higher in India. The highest production was achieved in 2021-22, i.e. 88.651 million tons, while the production in 2018-19 was the lowest in 5 years at 61 million tons. In 2020-21, it was 81 million tons. Now the continuation is that the production of sugarcane is about 80 million tons and the production of sugar in this season, which ended in February, is 5.8 million tons of sugar. Sindh is at the top in terms of per acre production of sugarcane, followed by Punjab. Pakistan produces 75 percent of its sugarcane production. This time, it is being said that there has been a 15 percent decrease in sugarcane production. Although the production of sugar is not low, factories are also interested in storing it instead of selling it. The thing is that if the stock is stopped at the beginning of the new crushing, a kind of unrealistic shortage is created. The shortage of sugar in the market will increase its price, this has been happening for the past several months. Pakistan has recently found a major buyer of sugar, Bangladesh, and recently the first Pakistani ship after 53 years had anchored in the port of Chittagong carrying 26,000 metric tons of sugar. Apart from sugarcane, sugar is also made from beetroot in Pakistan and this year 100,000 tons of sugar was made. The total sugar production of 5.9 million tons is not enough to meet the needs of Pakistani consumers, along with this, they can export some quantity and make their name in sugar exporting countries. Despite all this, if its price is increasing, there is a shortage or shortage of sugar in the market, then the reason is not that the production of sugarcane has decreased or sugar. The real reason is something else and that is making illegal profits, hoarding, creating artificial shortages and continuously increasing the price per kilo. The government should take immediate steps to bring the price of sugar to the previous level.