Government Plans to Deregulate Sugar Industry in Pakistan
The government of Pakistan is planning to fully deregulate the sugar industry, according to sources in the Ministry of Industries and Production.
Under the new proposal, the government will only keep a buffer stock of 500,000 tonnes of sugar. Apart from this, the private sector will take full control of sugar pricing, buying, and selling.
The final draft of this plan has been prepared with the help of important stakeholders and is likely to be presented to the Prime Minister next week.
The Trading Corporation of Pakistan (TCP) will maintain a sugar stock equal to one month’s national need. All other sugar trade will be handled by private companies.
The proposal also says that if prices go up after deregulation, the Benazir Income Support Programme (BISP) may get more funds to help poor families.
If there is extra sugar production, it will be exported to earn more money for the country. This will also help farmers get better prices for their sugarcane.
According to government estimates, running sugar mills at 70% capacity instead of 50% can increase sugar production by 2.5 million tonnes. Exporting this extra sugar could bring in up to $1.5 billion in foreign exchange.
IMF Objects to Sugar Import Subsidy
Earlier, the International Monetary Fund (IMF) raised concerns about Pakistan’s decision to give tax breaks and subsidies on imported sugar.
The IMF strongly opposed the government’s plan to provide a subsidy of Rs 55 per kg on imported sugar, which would cost Pakistan Rs 249 per kg.
The IMF also rejected the government’s claim that the import was necessary due to a “food emergency.” These subsidies could risk Pakistan’s $7 billion loan program with the IMF.
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