Pakistan’s sugar industry is a crucial part of the country’s economy, and it is once again at a turning point. In 2024, the industry generated annual revenue of around Rs. 200 billion and employed over nine million people, according to industry figures. Sugarcane accounts for around 0.8% of GDP and 3.2% of agricultural value addition, according to the Pakistan Economic Survey 2025–26, and the crop supports livelihoods across the cane belts of Punjab and Sindh. The sector is both a pillar of economic stability and a source of growing anxiety. Export successes, such as the 2024 shipment to Bangladesh, highlight its potential, but enduring problems, such as water-intensive cultivation and decades of heavy state regulation, threaten its long-term sustainability.
Sugar Exports to Bangladesh
In December 2024, Pakistan agreed to export 25,000 tonnes of refined sugar to Bangladesh, shipped from Karachi to Chittagong the following month. It was the largest consignment to Bangladesh in decades. Bangladesh had previously relied on India, which had restricted its own sugar exports, and the switch showed that Pakistani sugar could compete on both price and quality.
The Bangladesh deal was part of a wider programme. With Prime Minister Shehbaz Sharif’s approval, the industry signed contracts to export around 600,000 tonnes that season, expected to earn $400–500 million in foreign exchange. Buyers included Thailand (50,000 tonnes), the Central Asian republics (70,000 tonnes), and several Gulf, Arab and African countries. At the time, world sugar prices stood at about $530 per tonne.
From Surplus to Shortage and Back
The export boom did not last. In 2025, domestic prices rose sharply and Pakistan had to import sugar. Production has since rebounded close to historical highs, and the industry now faces the opposite problem: a surplus of around 1.25 million tonnes, with the next crushing season due to begin in November 2026. In September 2026, the government approved exports of 200,000 tonnes, while the Pakistan Sugar Mills Association is lobbying for another 800,000 tonnes. Mills now say the industry is in crisis, even as households continue to pay more at the counter. This repeated cycle of export permissions, emergency imports and unsold stocks is itself the clearest argument for reform.
The Titans of Pakistan’s Sugar Industry
JDW Group is the largest producer, with a capacity of over 500,000 tonnes a year, and has expanded into ethanol and renewable energy. Shakarganj Limited, with an annual output of over 150,000 tonnes, is known for innovative processing and by-product exports. Almoiz Group combines sugar production with ethanol and cogeneration power. Habib Sugar Mills, known for exporting refined sugar and ethanol, uses modern technology to produce 120,000 tonnes. Noon Sugar Mills, one of the oldest, concentrates on premium production and by-product innovation in Punjab. Together, these companies drive the sector’s output and export potential.
Smaller Players
Smaller mills such as Mehran Sugar Mills, Dewan Sugar Mills and Faran Sugar Mills matter just as much. Although they operate on a smaller scale, they add to the industry’s overall production and support local economies.
Two Faces of Sugarcane Cultivation
Two main types of sugarcane form the core of Pakistan’s sugar production:
- Barki (commercial cane): Yields 12–14% sucrose and covers 60–65% of the acreage. It is highly profitable, but pests and unpredictable weather make its productivity uneven.
- Desi (traditional cane): Grown on marginal soils, it has a lower sucrose content (9–11%). It is pest-resistant but less suited to industrial use.
Sugarcane varieties differ strikingly around the world:
- India, the world’s second-largest producer after Brazil, mainly grows Co 86032 and CoJ 64 (an early-season variety), with an average sucrose content of 12–15%.
- Brazil, the world’s largest producer and exporter, grows cultivars such as RB72454 and CTC 9001 and benefits from advanced research and sustainable practices.
- Australia grows varieties such as Q208 and Q183, with 14–16% sucrose. State-of-the-art technology keeps its efficiency high despite smaller volumes.
This comparison shows that Pakistan needs stronger sugarcane breeding programmes to improve both resilience and yields.
The Environmental Cost
Sugarcane cultivation carries a heavy environmental cost. An estimated 1,500–2,000 litres of water are needed to produce one kilogram of sugar, which deepens water scarcity in arid regions of Sindh and Punjab. Poor waste disposal, including the dumping of press mud and untreated bagasse ash, also pollutes soil and water.
Regulation: A Chokehold Being Loosened
For decades, the state controlled almost every lever of the sector: cane prices, mill zoning, crushing dates, export permissions and licences for new mills. These controls often ignored actual crop yields and discouraged mills from expanding or modernising, trapping the sector in inefficiency.
That may now change. In January 2026, the government announced plans to deregulate the sector as part of reforms agreed with the IMF. Under the plan, farmers may grow any variety and sell to any mill, cane prices will be set by the market, mills may import raw sugar to refine and export, and the ban on new mills has been lifted. Implementation has been uneven, however: exports still require government approval, as the current dispute over surplus stocks shows.
By-Products: The Unsung Hero
By-products are a vital lifeline for the industry, particularly when sugar prices fluctuate:
- Ethanol: Export demand, mainly from Europe and the US, has grown by about 15% a year, bringing in substantial revenue.
- Bagasse: Increasingly used for paper-making and renewable energy, it is helping mills become self-sufficient in power.
- Molasses: A nutrient-rich by-product used to make ethanol, alcohol, organic fertilisers and animal feed.
- Press mud: A by-product of juice filtration that can be used for composting or as organic fertiliser.
Together, these by-products contribute more than Rs. 50 billion a year to the economy.
A Path to Sustainable Growth
The industry needs reforms to secure its growth:
- Complete deregulation: Follow through on the 2026 reform plan so that exports and imports respond to market conditions rather than administrative decisions.
- Invest in technology: Develop sugarcane varieties that can withstand pests and climate stress.
- Expand export markets: Offer incentives for ethanol and other by-product exports.
- Ensure fair practices: Standardise the measurement of sucrose content and end unfair deductions from farmers’ payments.
A Balanced Future
Despite its challenges, Pakistan’s sugar industry remains a cornerstone of the economy. By building on its strengths, particularly by-products such as ethanol, molasses and bagasse, and by completing reforms that free it from stop-start regulation, the sector can move from recurring crises to lasting competitiveness. With a focus on innovation, fair practices and sustainability, it can become a globally competitive industry that delivers long-term growth for farmers, mills and consumers alike.
The views expressed in this article are those of the author and not necessarily those of The Lahore Times.
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