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3d ago

Pakistan Re-Evaluates Sugar Import Subsidies as IMF Warns of Loan Risk

Following the IMF’s rejection of Islamabad’s food-emergency rationale, provinces will enforce a PKR165 per kilogram ex-mill price under a newly reviewed duty-free import scheme.

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Pakistan PM Shehbaz Sharif may have to now roll back the policy.

Overview

  • The IMF cautioned that Pakistan’s tax exemptions and PKR55 per kilogram subsidy on 500,000 metric tons of imported sugar breach the $7 billion loan agreement and dismissed the food-emergency claim.
  • Islamabad’s federal cabinet approved full duty exemptions on half a million metric tons of sugar without consulting the Finance Ministry, prompting a policy reassessment under IMF pressure.
  • The Trading Corporation of Pakistan’s tender for 300,000 metric tons of duty-free sugar closes on July 18 while the government reviews its import strategy.
  • Government negotiators and the sugar industry agreed to set a PKR165 per kilogram ex-mill price, and provincial authorities are preparing to ensure availability at that rate.
  • The Pakistan Sugar Mills Association says local mills have enough stock to meet demand until November and warns that duty waivers undermine revenue targets.