PM Defends Decision to Export Imported Sugar to Avoid Losses
The federal cabinet approved the export of 108,000 metric tonnes of imported sugar that is nearing expiry, aiming to recover landed costs and prevent fiscal losses.
Share
Desk Analysis
How This Affects the Exchange
Sector Effect
Negative · Do not buy
Sugar export reflects fiscal strain and pricing pressures, suggesting a negative bias for related market exposure; avoid buying related equities.
Sectors & Direction
Desk read
Desk call: Do not buy · Negatively affected
- EconomyNegatively affected
Companies
Companies Mentioned
- ISL· Negatively affected · Do not buy
Mentions in This Briefing
Sectors: Economy — Negative · Do not buy. PSX tickers: ISL. Sugar export reflects fiscal strain and pricing pressures, suggesting a negative bias for related market exposure; avoid buying related equities.
Full Story
Open on Business Recorder## Cabinet Approval of Sugar Export
Prime Minister Shehbaz Sharif defended the government's move to export around 108,000 metric tonnes of imported white crystalline sugar, calling media reports about the initiative "fallacious." He said the export is intended to avoid financial losses as the stock approaches the end of its two‑year shelf life.
## Background on Imports and Domestic Shortage
In June 2025 the Economic Coordination Committee (ECC) authorized the import of up to 500,000 MT of sugar to ensure adequate domestic supply and curb price spikes. The Trading Corporation of Pakistan (TCP) ultimately imported 300,000 MT between September and November 2025. About 192,000 MT was sold locally, while the remaining 108,000 MT stayed in TCP warehouses.
## Reasons for Export Decision
Domestic sugarcane output fell roughly 15 % in the 2024‑25 crushing season due to heatwaves and crop diseases, pushing retail prices to Rs 220‑250 per kilogram. TCP’s attempts to sell the remaining stock through tenders in November 2025 attracted bids far below the landed cost (Rs 132‑140 per kg versus the import cost), leading to rejected offers. The corporation also incurred a monthly carrying cost of over Rs 200 million.
## Export Process and Oversight
The Steering Committee on Sugar, meeting on 12 August 2026, ruled that the stock could not be sold to a single private buyer under PPRA rules. It directed the Ministry of National Food Security and Research to seek ECC approval for an international competitive bidding process. The Commerce Division proposed that the tender be televised and that border‑crossing logistics be clearly defined.
## Outstanding Payments and Fiscal Concerns
The ECC highlighted that about Rs 15 billion remains unpaid for the 192,000 MT already sold domestically, with dues owed by provincial governments, corporate entities, and Karachi sugar dealers. TCP has been asked to provide a detailed ageing schedule of these receivables.
## Outlook
If the export proceeds through a transparent international tender, the government expects to recover the landed and carrying costs of the sugar, mitigating potential losses from spoilage. However, the episode underscores challenges in forecasting food‑commodity demand and the fiscal impact of cyclical import‑export cycles.