ISLAMABAD: The federal government has decided in principle to deregulate the sugar sector completely, but the final decision will be made after Prime Minister Shehbaz Sharif’s approval.
According to a media report, the government has prepared proposals to remove direct control from the sugar industry. Under the new plan, the government will only maintain a buffer stock of 500,000 tonnes of sugar and will not intervene in other market operations.
Officials said the final draft of these proposals, prepared after consultation with stakeholders, will be submitted to the Prime Minister next week.
The plan suggests that the Trading Corporation of Pakistan (TCP) will hold a one-month supply of sugar as buffer stock. If prices become unstable after deregulation, the government may increase subsidies to manage consumer impact. Surplus sugar will be allowed for export, which could help farmers receive better rates for their sugarcane.
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Sources also said that sugar mills will be allowed to operate at 70% capacity instead of the current 50%. This could lead to an additional production of 2.5 million tonnes of sugar.
By exporting the surplus, Pakistan could earn around $1.5 billion in foreign exchange. Except for the buffer stock managed by TCP, all other sugar trading will be handled by the private sector.
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