The federal government has finalized a comprehensive national policy aimed at restructuring Pakistan’s sugar sector by dismantling decades-old administrative controls over pricing, production, and trade.
Officials said the proposed National Deregulation Policy seeks to introduce market-based mechanisms, promote competition, and ensure fair outcomes for both consumers and sugarcane growers. The reform also fulfills a key commitment made under Pakistan’s economic program with the International Monetary Fund to gradually eliminate direct and indirect price controls throughout the sugar supply chain.
End of Zoning Restrictions
One of the most significant changes under the policy is the planned abolition of the zoning system, which previously restricted farmers to selling sugarcane only to designated mills and regulated the establishment or expansion of sugar factories.
Government officials noted that the system had historically concentrated market power among a limited number of mill owners while reducing farmers’ bargaining ability. Removal of zoning restrictions will allow growers to sell their crops to any buyer, including private investors and competing mills, enabling transparent price discovery.
Support for Farmers and Transparency Measures
The reform package includes several initiatives to strengthen the agricultural side of the industry, such as third-party weighing mechanisms to prevent disputes, improved access to agricultural financing, and incentives for mechanization to enhance productivity and reduce costs.
Authorities believe these measures will help increase farmer incomes while improving supply chain efficiency.
Liberalized Sugar Trade
The government also plans to phase out politically managed decisions regarding sugar imports and exports. Under the new framework, trade will gradually shift toward a liberalized regime beginning November 2026, with annual assessments of domestic consumption needs guiding market decisions.
Production monitoring will be supported through a digital track-and-trace system designed to improve transparency and curb market manipulation.
Pakistan currently produces approximately 6.13 million tonnes of refined sugar annually, ranking among the world’s leading producers, with 79 operational sugar mills nationwide. The government expects the reforms to modernize the sector and reduce recurring price volatility in the domestic market.
