Sugar mills face govt crackdown after failing to honour price deal

• PSMA, govt inked agreement to ensure ex-mill price of Rs165 per kg.
• Artificial shortage created after some sugar mills halt their sales.
• Violators to face legal action in coordination with FBR: minister.

ISLAMABAD: The Pakistan Sugar Mills Association (PSMA), despite recently agreeing to cap the ex-mill sugar price at Rs165 per kilogramme, has failed to honor the deal — prompting a stern warning from the government after reports emerged that several mills are not only overcharging but have also halted market supply of the sweetener, The News reported on Wednesday.

Federal Minister for National Food Security and Research, Rana Tanveer Hussain, who chaired a meeting on Tuesday, slammed the sugar sector's non-compliance and vowed strict action against profiteering, hoarding, and price manipulation. "The government will not tolerate market distortion at the expense of consumers," he warned.

On 14 July, the PSMA and the Ministry of National Food Security had inked the agreement to ensure ex-mill supplies at Rs165 per kg from July 15 to August 15 (for first month), then with an addition of Rs2 per kg every successive month till 15 October.

The meeting, attended by PSMA officials, provincial agriculture departments, and key industry stakeholders, reviewed the implementation of the agreed price mechanism. The minister voiced serious concern over artificial price hikes caused by mills defying the official rate, burdening consumers ahead of peak demand season.

An official who attended the meeting told the publication that the Federal Investigation Agency (FIA) had reported that some mills have halted their sales for the last couple of days, creating artificial shortages and price hikes. He further said that when Tanveer Hussain asked the millers and especially those signed the agreement, they failed to satisfy the minister.

"If PSMA fails to ensure compliance among its members, a nationwide crackdown will begin," Hussain said, adding that violators will face legal action in coordination with the Federal Board of Revenue (FBR) and provincial food authorities. He directed provincial governments to submit enforcement reports within 24 hours and to strengthen district-level monitoring to detect and prevent illegal activities in the sugar supply chain. Transparency and fair distribution, he stressed, are essential to protect consumer rights.

Hussain reaffirmed the government’s commitment to price stability and urged all stakeholders to act responsibly. "The uninterrupted supply of sugar at fair prices is non-negotiable," he added.