Pakistan’s Federal Board of Revenue (FBR) has suspended 14 of its own officers amid allegations they facilitated the illegal release of sugar stocks—part of a deepening investigation into suspected market manipulation worth hundreds of billions of rupees.
The National Assembly’s Standing Committee on Commerce and Industry was told the suspensions are linked to violations of the mandatory track-and-trace system, with some officials accused of clearing unstamped sugar bags from mills. Trucks carrying the untaxed stock have been intercepted in recent weeks.
Windfall Profits Under Scrutiny
The committee, chaired by PTI’s Atif Khan, is now seeking records from the Securities and Exchange Commission of Pakistan (SECP) to identify mill directors holding at least a 20% stake. Lawmakers are particularly interested in the ownership trail after reports that producers and dealers reaped an estimated Rs300 billion in excess profits through price hikes and export timing.
According to the Ministry of Industries and Production, sugar prices surged after the government’s export deadline expired—despite earlier assurances from millers to keep ex-mill rates at Rs159 and retail prices at Rs164 per kilo until April 2025. Instead, prices rose in May, even as the ministry warned against it.
Production Drop Fuels Price Pressure
Although sugarcane planting in the 2024–25 season increased slightly—up 1.11%—heatwaves and crop diseases hit yields and sugar recovery rates. Production slipped to 5.86 million metric tons, nearly a million tons less than last year. Combined with modest carryover stocks of half a million tons, the shortfall left little cushion for domestic demand, helping drive the early 2024 price spike.
Political and Regulatory Links to Be Probed
The FBR told lawmakers that despite lower output, sales tax collection from sugar jumped from Rs65 billion last year to Rs100 billion this year, reflecting higher market prices. Prime Minister Shehbaz Sharif has formed a dedicated monitoring cell to oversee the crackdown.
The committee plans to summon SECP officials to map out sugar mill ownership and assess whether political figures may have benefited from the price manipulations now under investigation.
