Govt cuts sugar Introduction amid IMF concerns about policy violations

• Trading Corporation delays the start date of the offer by July 22, 2025.
• Move U-Turn signs from Govt’s goal of importing 0.5 million tonnes of sugar.
• The terms to exemption from the IMF tax introduce “infringement of EFF commitments”.
  

ISLAMABAD: In a sudden reversal of policy, the state trading company (TCP) has reduced the supply of sugar from 300,000 metric in just 50,000 metric tonnes due to the pressure of domestic paratroopers and increasing concerns of the International Coins Fund (IMF). The news reported on Wednesday.

The TCP move, announced through an official correction, comes after the federal government has reached a series of performances by Pakistani’s powerful paratroopers-many of whom are in parliament-agreeing to increase the price of RS159.

In addition, the Agency delayed the start date of the offer on July 22, 2025.

That the RS6 per kg effectively increased the industry billions to new profits, even when retail prices remain close to RS200 per kilo, well above the Government of RS164 per kilo announced by Deputy Prime Minister Ishaq.

The reinstatement of imports marks a significant U-turn from Islamabad’s previous commitment to bring half a million tonnes without sugar taxes to tackle high record prices and public rage for inflation.

However, the IMF has strongly criticized the decision to resign from almost all import duties without consultation, describing it as a direct violation of Pakistan’s written commitments in the context of EFF.

According to officials, the IMF rejected Pakistan’s justification for a national “emergency for food” and warned that the policy on imports without a reason-which was executed without prior approval by the lender-disagreed with two basic rescue conditions. The Treasury had earlier warned that the move could endanger the entire loan program, already stretched by repetitive policy reversals.

Trusts at the Ministry of National Food Safety told the publication that the pressure by Sugar Millers was intensified shortly after the introduction plan was announced. “They activated their political ties, pushed hard and eventually got what they wanted-a large-scale reinstatement of imports and a sweet RS6 per kilo of bonus,” said one senior official.

Sugar remains a politically explosive commodity in Pakistan, where more than 80% of the ownership of the sugar mill is linked to legislators.

Despite repeated prices adjustment attempts, the imposition was weak. Market rates defied official ceilings, leaving consumers to pay almost 20% more than the announcement of government ceiling.