Muhammad Luqman

With the start of the sugarcane crushing season at all 41 sugar mills in Punjab, open-market sugar prices— which had crossed Rs 200 per kilogram in October — have now fallen to around Rs 175 in wholesale markets, according to dealers. “The ex-mill rate before the crushing season was Rs 18,000 per 100 kg. Now it ranges between Rs 16,500 and Rs 17,000. A 50-kg bag that was selling at Rs 9,100 has come down to Rs 8,700,” Hafiz Zeeshan Ghafoori, a wholesale dealer, told Wealth Pakistan.

However, he noted that retail prices in Lahore and other parts of Punjab were still hovering around Rs 200 per kg, despite the official rate for the current month being Rs 179. “The inflated retail prices are being driven by market forces, largely due to the relaxed attitude of district administrations and the market price control department,” Ghafoori added. Wholesale traders at Akbari Mandi expect prices to decline further, possibly reaching Rs 150 per kg by the end of December.

“With ex-mill prices declining daily, we can safely expect another Rs 20 per kg reduction over the next month,” Muhammad Amjad, President of the Sugar Dealers Association, Akbari Mandi, told Wealth Pakistan. He said ex-mill prices of 50-kg bags were falling by roughly Rs 50 each day due to the increased cultivated area and higher sugarcane production this year. Punjab, the largest contributor to Pakistan’s sugarcane output, expanded its cultivation area by 4.8% to 856,000 hectares in 2025–26.

Resultantly, the province’s sugarcane production rose by 2.7%, reaching 61.73 million tons compared to last year’s 60.11 million tons. However, Amjad said prices were unlikely to fall back to Rs 100 per kg — as they were a couple of years ago — but were expected to stabilise around Rs 150 by the end of the crushing season in March next year. According to sugar millers, due to deregulation of cane pricing this year, sugarcane is being purchased at around Rs 400 per 40 kg.

They also claim that sugar recovery remains below 9% in most parts of Punjab. “Hopefully, sugarcane crushing will become economically viable by the end of December, once the sugar recovery level crosses the 9% mark,” said Muhammad Waheed Chaudhary, a sugar mill owner. He noted that most millers began crushing by mid-November in compliance with the Punjab Sugar Factories Control (Amendment) Act, 2021, to avoid heavy fines and penalties.

The Pakistan Sugar Mills Association (PSMA) had opposed the November 15 start date for crushing, but all mills eventually began operations on or shortly after the deadline under government pressure. Sugar technologists were also divided over the early start, mainly due to concerns about low sugar recovery. The Cane Commissioner’s Office has issued notices to some mills for starting operations after the November 15 deadline. “Hopefully, the matter will be resolved amicably soon,” the PSMA spokesman said.

Credit: INP-WealthPk