Pakistan’s sugar export decision raises concerns over food security and prices

New Delhi: Pakistan's decision to allow the export of 108,000 metric tonnes of sugar has drawn criticism, according to a report.

A report published in The Express Tribune said the decision could lead to higher domestic prices while benefiting influential sugar mill owners.

The move reverses the government's earlier approach, it said and added that Pakistan imported sugar in recent years to stabilise domestic supplies and prices but is now allowing exports of available stocks despite concerns over future shortages.

The policy risks reducing domestic buffer stocks and could contribute to higher sugar prices if supplies tighten in the local market.

Similar policies in the past have been followed by imports aimed at addressing supply shortages.

Apart from consumer, environmental concerns have also been raised.

“Beyond consumer exploitation, this policy carries severe environmental and agricultural consequences,” The Express Tribune said.

“Sugarcane is an exceptionally water-intensive crop, consuming vast quantities of Pakistan's rapidly depleting groundwater reserves. By providing state-backed safety nets and artificial export incentives to sugar millers, the government effectively subsidises the virtual export of water, a scarce natural resource, to international buyers at discount rates,” it added.

Moreover, policies encouraging sugar production and exports in Pakistan may divert land and resources away from other crops, including wheat.

The report further alleges that political influence within Pakistan's sugar sector has contributed to policy decisions favouring mill owners.

Reference was made to warnings by the Competition Commission of Pakistan regarding the accuracy of industry data used in export decisions.

Former proposals for reform had recommended reducing government intervention in the sugar trade and allowing market forces to determine production, pricing and imports.

However, the report showed that reducing available stocks could leave consumers vulnerable to future price increases.

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