The latest IMF Technical Assistance Report has raised serious concerns about Pakistan’s sugar industry, describing it as a textbook case of how influential business groups and state regulators can work together to secure private gains at the public’s expense. The findings indicate a long-standing pattern of market distortion and policy manipulation that has allowed sugar mills to thrive while consumers bear the burden.

According to the report, sugar mill owners have benefited for decades from favorable government policies, targeted subsidies and regulatory gaps that collectively strengthen their control over the market. These advantages have enabled the sector to operate with consistent profitability, even in periods of broader economic instability.

The IMF notes that the industry’s structure makes it easy for dominant players to influence pricing, production and supply mechanisms. Restrictions on imports, preferential financing and export incentives have created a climate where competition is undermined and sugar cartels maintain a disproportionate level of power.

One of the key observations in the report is the recurring cycle of artificial shortages and price spikes. Analysts highlight that such fluctuations are often linked less to genuine supply problems and more to deliberate market manipulation through hoarding and coordinated actions by mill owners.

The report also flags that regulatory institutions tasked with monitoring the sector lack independence and enforcement power. In several instances, oversight agencies acted in ways that aligned with industry interests rather than protecting consumer welfare or ensuring transparent market operations.

Sugar remains a politically sensitive commodity in Pakistan, with many mill owners holding prominent positions in politics and business. This overlapping influence has made meaningful reform difficult, allowing longstanding inefficiencies and exploitation to continue unchecked.

The IMF has recommended policy changes focused on improving market transparency, strengthening competition laws and removing distortions that protect cartel behavior. These steps, the report argues, are essential to ensure fair pricing and reduce the economic burden on ordinary citizens.

The findings renew public debate over the need for accountability and structural reforms within Pakistan’s agriculture and commodities sectors. As global financial institutions continue to press for greater transparency, the government now faces increasing pressure to confront entrenched interests and restore credibility to the market.