Sugar prices in Pakistan have spiked to an unprecedented Rs200 per kilogram, with mounting evidence pointing toward a powerful cartel of sugar mill owners accused of manipulating supply and export data to drive up profits.

According to official records and past investigations, the sugar industry has long benefitted from government subsidies and export permissions, all while failing to control domestic prices. Between 2015 and 2020, 26 mills were granted Rs4.12 billion in subsidies to export 400,000 metric tons of sugar. Despite this support, prices remained volatile and continued to burden ordinary consumers.

A key area of concern is the alleged manipulation of export figures, particularly in trade with Afghanistan. While sugar producers claimed to have exported 2.35 million metric tons to the neighboring country, Afghan authorities confirmed receipt of only 1.5 million metric tons. The whereabouts of the remaining 778,000 metric tons remain unaccounted for, raising suspicions of large-scale fraud.

Past investigations by the Federal Investigation Agency (FIA) uncovered price-fixing practices involving 38 sugar mills. From 2018 to 2020, mill owners were accused of inflating production costs to justify higher consumer prices. These tactics reportedly cost the public Rs110 billion, generated Rs53 billion in excess profits for mill owners, and enabled tax evasion of Rs18 billion.

The crisis has worsened in 2024. Since January, sugar prices have increased by Rs60 per kg. After the government approved the export of 750,000 tons earlier this year, domestic prices surged from the official Rs140 per kg to Rs170, eventually hitting Rs200.

In an attempt to cool the market, the government has announced plans to import 500,000 tons of sugar. However, the International Monetary Fund (IMF) has been pressing Pakistan to end all export subsidies and allow market forces to determine sugar pricing. These conditions have been in place since 2021 as part of broader economic reform demands.

As the government prepares for emergency imports, public frustration is mounting over what many view as unchecked profiteering at the expense of consumers. The unfolding situation has once again brought the sugar sector’s lack of transparency and accountability into sharp focus.