At the end of 2024, the Federal Government negotiated a new IMF agreement; In return, Pakistan finished the minimum support price. It was expected to have massive consequences, especially for the wheat and sugar industry. Today, in the National Food Security Committee, one felt those consequences.
The federal minister, Rana Tanveer Hussain, explained that last year, sugar production was 7.6 million tons, while domestic demand was 6.3 million tons, leaving a surplus of 1.3 million tons, which had negatively affected the industry. This year, sugar production was estimated at 7.2 million tons, but real production remained 5.8 million tons.
“The Government has reduced RS 210 sugar prices per kg, and a subsidy on sugar exports was not provided.” Without the support price, the surplus only damaged the farmer.
The member of the Hayat Committee urged the authorities to provide some protection to farmers in the future. Officials of the Ministry of Food Security indicated that wheat prices had increased due to floods, but now they are under control. Rana has questioned why sugar prices were not regulated in a similar way, warning that importing sugar during the crushing season could damage farmers.
Rana Tanveer Hussain added that last year, the production of sugarcane fell 1 million tons below the target. “We allowed surplus sugar exports, which earned $ 450 million in currencies. Now, we are importing sugar worth $ 150 million, and the price increase was caused by the mafia,” he said. In addition, he mentioned that a sparks of bumper sugar cane is expected this year.
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The minister also stressed that wheat production has decreased due to the absence of support prices, and a greater decrease this year is expected. The Government has decided to consult the IMF to restore wheat support prices and is trying to convince the IMF to relieve food restrictions.
Rana Tanveer Hussain said that government control has caused wheat prices to increase in the market. A new wheat policy is expected to be implemented since the first week of October, with the aim of protecting both farmers and consumers.
“If the production of wheat falls by another 6 percent this year, Pakistan may need to import wheat worth $ 1.5 billion, which would give it a significant load for the national treasure.”
Wheat production suffered greatly once the support price ended, which was already low, since the MSP was not available, and now the wheat supply has reached low levels in danger with floods.
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This year, sugar prices saw a recent increase due to the influence of the mafia. The authorities have constantly blamed the precious prices to the alleged collusion among the influential actors in the sugar sector, often known as the “sugar mafia”, accused of monopolizing and manipulating the supply to inflate prices. In response to the crisis, the federal government had previously announced a temporary elimination of import taxes on sugar in an effort to reduce internal prices.
The Grocers wholesale association has constantly criticized the import -based approach and, instead, urged the government to take strong measures against hoarders. They have requested warehouse inspections and repressions in illegal storage, arguing that this application could significantly reduce sugar prices in the local market.
