- FBR officials placed on sugar mills premises.
- Sugar prices drop from Rs185 to Rs165 after action.
- PM closely monitoring crackdown on sugar sector.
ISLAMABAD: Prime Minister Shehbaz Sharif on Sunday authorised the Federal Board of Revenue (FBR), Federal Investigation Agency (FIA), and Intelligence Bureau (IB) to take stringent action against sugar sector players accused of amassing Rs140 billion in unjustified profits within a short period, The News reported.
As part of a two-pronged strategy, the government has deployed FBR and intelligence officials to sugar mills premises to monitor operations and curb illicit activities. Authorities have also gathered critical financial data to expose long-standing irregularities and malpractices within the industry.
During the three months of crushing season, the government was able to identify the sugar mills involved in malpractices besides identification of hoarders, members of satta (betting) sugar mafia, and various mill owners involved in manipulation of sugar production, stocks and its price.
Under a well-conceived strategy, as a first step based on the data available regarding purchases, lifting of sugar, balance available stock of particular dealer with the mills as well as payments made either through their personally maintained bank accounts or fake accounts maintained in the name of servants, the government has a clear visibility of fake buyers and amounts transferred into the fake and benami (unnamed) accounts of the sugar mills.
This has adequately enabled the government to initiate criminal proceedings under the anti-money laundering laws, anti benami act, tax-evasion and anti-hoarding laws being a cognizable offence.
The countrywide undeterred operations against the politically connected most power sugar lobbies has sent a strong message to the sugar hoarders and “Satta mafia” that the government in in no mood to spare anyone irrespective of political affiliation and powerful status. Shehbaz himself is monitoring the action against the sugar sector.
In the second phase of the strategy, if the market forces remain unresponsive, based on the available undeniable evidences, the government is contemplating a crackdown on the millers directly involved in malpractices and facilitation of wrongdoings by hiding the stocks in their mills and receiving payments through fake and benami bank accounts.
Consequent to the first phase of strategy, an immediate downward trend in sugar prices has been witnessed. It is pertinent to mention that on 13 March i.e., before the crackdown, the sugar price in Lahore and adjoining areas was around Rs175-185/kg; however, the price dropped to Rs165/kg by March 16.
Earlier, an inflationary trend in sugar prices was witnessed. It may be added that at the start of crushing season, on November 22, 2025, national average sugar price was Rs137/kg which surged to Rs173/kg on March 14.
In major urban centers like Lahore, Karachi, Faisalabad, Peshawar and Quetta price of sugar had reached at/around Rs180-185.
The Satta mafia was speculating that the sugar price will surge to Rs200 in next few months and will reach Rs220 by the end of season in November 2025.
Owing to the said inflationary trend, the investors and dealers were heavily investing in sugar stocks to earn windfall profits in a short time.
It is learnt that currently, the sugar representative bodies are trying to negotiate ex-factory prices with the government, keeping in view the average price of sugarcane in the crushing season.
“There are estimates that the millers devised a nexus with wholesalers, dealers and distributors and manipulated the prices in the domestic market. The estimated prices of sugar at ex-mill price and then with imposition of sales tax has been worked out at Rs140 to Rs145 per kg. By incorporating other costs, the maximum price of sugar should not be more than Rs155-160 per kg,” top official sources confirmed while talking to The News on Sunday.
As an important development, the relevant authorities have proposed a paradigm shift in regulatory mechanism to the government for introducing and amending the laws to confiscate the seized sugar of stockists instead of selling it out at official price and returning them the money.
Official sources said the prime minister had given the go ahead for the crackdown on the sugar mafia which would continue without any interventions.
The FIA, IB and FBR have conducted operations and found proofs and evidence from hoarders, stockists, wholesalers and distributors leading to alleged manipulation of fixing the domestic prices.
