By Our Correspondent
LAHORE – A General Body meeting of the Pakistan Sugar Mills Association (PSMA) was held today, during which all member mills unanimously urged the federal government to fully deregulate the sugar sector, similar to the deregulation of sugarcane at the provincial level.
In a press statement, a PSMA spokesperson emphasized the need for the sugar industry to operate under free-market principles, highlighting that the sector is Pakistan’s second-largest agro-based industry after textiles. The sugar industry contributes significantly to the national economy, generating business activity worth Rs. 1,000 billion during the crushing season across agriculture, transport, allied industries, wholesale, and retail markets. It also contributes approximately Rs. 225 billion in direct and indirect taxes to federal, provincial, and local governments.
The PSMA highlighted the sugar sector’s role in import substitution, claiming it offsets up to $4 billion in imports annually. The industry also produces indigenous energy by utilizing bagasse, a sugarcane byproduct, to generate electricity that is supplied to the national grid. This energy production has also led to the emergence of a related steel industry.
The Association called for the revival of the 2009 Ethanol Blending Policy, stating that bioethanol production in Pakistan has the potential to replace 7% of total gasoline consumption, strengthening the country’s energy mix and reducing dependence on imported fuels. Drawing parallels with Brazil and India, PSMA noted that using ethanol as a vehicle fuel could greatly benefit Pakistan.
Citing the success of deregulated sectors such as rice and maize—which are functioning efficiently under free-market principles and have attracted significant investment in research and development—the PSMA pointed out that rice exports alone bring in nearly $5 billion annually. In contrast, sugarcane development in Pakistan has seen limited progress due to overregulation.
The Association stressed the need for a permanent policy framework to support deregulation, enabling the sugar industry to enhance its contribution through employment generation, tax revenue, import substitution, and consistent foreign exchange earnings via surplus sugar exports.
PSMA reiterated that it has repeatedly advocated for deregulation in meetings with government officials, including the recent Sugar Advisory Board meeting held on July 17, 2025. The formation of a federal committee on sugar sector deregulation was welcomed by the industry, with hopes that this step would pave the way for the sector to reach its full economic potential.
