In a major development, the federal government has decided in principle to deregulate the sugar industry in a phased manner.

A draft proposal regarding deregulation has been prepared, which will be presented to Prime Minister Shehbaz Sharif next week.

According to the proposal, the government will maintain a buffer stock of only 500,000 tonnes of sugar, while the remaining market-related affairs will be managed by the private sector.

According to sources, the Trading Corporation of Pakistan (TCP) will only maintain a one month’s worth of sugar consumption to ensure quick response in case of emergencies.

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Apart from this, the government will not interfere in the production, prices or sale of sugar.

According to the proposal, if sugar prices could not be controlled, the government may increase the subsidy amount to provide relief to consumers.

The authorities believe that deregulation will not only increase competition in the market but will also enable sugarcane farmers to receive better prices for their crops.

According to the sources, by producing sufficient quantities of sugar, not only will the country’s needs be met but the country will also earn valuable foreign exchange through exports.

The government aims to increase the production capacity of sugar mills from 50% to 70%, which will result in additional 2.5 million tons of sugar annually.

This surplus sugar is expected to generate about $1.5 billion in foreign exchange through exports.