Sugar exports blamed for depleting domestic stocks, CCP tells FinMin

ISLAMABAD: Federal Minister for Finance, Muhammad Aurangzeb, on Monday received a detailed briefing from the Competition Commission of Pakistan (CCP) on challenges facing the sugar sector, including alleged cartelisation and the causes of the recent sugar shortage.

CCP Chairman Dr Kabir Sidhu informed the minister about the Commission’s actions against the sugar cartel and explained the factors behind the latest crisis. He said that sugar exports had reduced domestic stocks below required levels.

According to the CCP, the Sugar Advisory Board had provided the government with inaccurate estimates on sugarcane output, available stocks and sugar production between June and October last year. These flawed projections led the government to allow exports, which further depleted reserves.

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The Commission stressed that policymaking should not rely solely on data from the Pakistan Sugar Mills Association, urging that independent and transparent data be used instead. It added that it was preparing recommendations to assist the Sugar Sector Reform Committee.

Past sugar crises also linked to exports despite low supply

The finance minister was also briefed on the causes of previous sugar crises in 2008-09, 2015-16, and 2019-20, in which exports were also allowed despite limited supply. The CCP noted that it had issued orders against the sugar sector cartel in 2010 and 2021, with the 2009-10 inquiry uncovering clear evidence of cartelisation.

However, the 2010 decision has never been made public, as the Sindh High Court stayed the matter until 2021, and it is now pending before the Supreme Court. The Competition Tribunal remanded the 2021 decision back to the Commission for a rehearing, but all mills have since filed adjournment requests.

The CCP also shared its strategy for the rehearing process with the finance minister.

Minister Aurangzeb said the government would support the CCP in securing early hearings of pending court cases and pledged to further strengthen the Commission. He announced that the sugar sector would be fully deregulated, which would expand the CCP’s oversight role, and directed that data from other institutions be made available to assist investigations.