Amid growing public frustration over skyrocketing sugar prices and artificial shortages, the federal government has reached an agreement with sugar mill owners to fix the ex-mill price of sugar at Rs165 per kilogramme, the Ministry of National Food Security confirmed on Monday.

According to the terms of the agreement, millers will be allowed to increase the ex-mill rate by Rs2 per month, while provincial governments have been tasked with ensuring the availability of sugar at controlled rates in the retail market.

The move comes after sugar prices surged by Rs15 to Rs20 per kilogram in the past two weeks, with current retail prices ranging between Rs190 to Rs200 per kg across major cities. Two weeks ago, sugar was being sold at Rs175–Rs180 per kg. The sharp spike has led to panic among consumers, many of whom are now demanding immediate price relief.

Traders resist, cite losses

Despite the fixed ex-mill rate, traders at Lahore's Akbari Mandi expressed concerns about the practicality of the agreement. "We bought sugar at Rs180/kg. How can we sell it at Rs165?" said one wholesaler, reflecting the confusion in the market.

Many shopkeepers have halted sales altogether, blaming the suspension of sugar loading from mills and ongoing government crackdowns. Officials say supply chains will normalize soon.

Export-driven crisis and record manipulation

Industry insiders and official documents reveal that the current crisis stems from massive sugar exports earlier this year. With government approval, sugar mill owners exported 750,000 metric tons of sugar abroad, citing surplus stocks when domestic prices briefly dipped to Rs120/kg in March.

However, after the exports, an artificial shortage was created domestically, leading to a surge in local prices by Rs60 per kg within just seven months.

The crisis deepened with revelations that records for over 778,000 tons of previously exported sugar have mysteriously vanished. An investigation shows that 26 mills took Rs4.12 billion in subsidies between 2015 and 2020 to export 400,000 tons of sugar — a scheme that reportedly cost consumers over Rs110 billion due to price manipulation, artificial shortages, and tax evasion.

The Federal Investigation Agency (FIA) has already registered cases against 38 sugar mills, yet the practice of arbitrary pricing remains rampant.

Govt to import 500,000 tons to curb prices

To counter the crisis, the government has decided to import 500,000 tons of sugar to stabilize market prices and dismantle the hold of the so-called "sugar mafia." The move is also aimed at fulfilling International Monetary Fund (IMF) demands, which include abolishing subsidies and deregulating the sugar supply chain.

The Competition Commission of Pakistan has supported these reforms, recommending an end to export quotas and the establishment of new mills to break monopolistic control over the industry.

Meanwhile, the Ministry of Food Security maintains that steps are being taken to ensure transparency and affordability. “The public will not be left at the mercy of profiteers,” an official said, vowing strict enforcement of the newly agreed pricing framework.