Seasons of two major crops, sugarcane and wheat, begin one after the other, and so does the debate over their price fixation and procurement.

The minimum support price for sugarcane is usually fixed around October, with crushing starting in November, while the wheat support price is set around November or December, with harvesting beginning by late February.

By the close of the kharif season, farmers start demanding price fixation. The Sindh Abadgar Board and Sindh Abadgar Ittehad have already made their demands, urging the government to fix the wheat support price at Rs4,500-Rs5,000 per 40kg and sugarcane at Rs500-Rs600 per 40kg for the FY27 season to meet their cost of production.

Sindh produced 2.02 million tonnes of sugar in FY26 after crushing 19.18m tonnes of sugarcane, with sucrose recovery recorded at 10.38 per cent. In FY25, mills produced 1.62m tonnes of sugar, with sugar recovery at 9.48pc, after crushing 16.4m tonnes of sugarcane.

Cash-rich middlemen continue to manipulate prices, much to farmers’ chagrin and consumers’ detriment

From farmers’ point of view, sugarcane’s minimum support price needs to be fixed in September because the crop is mature enough by October. Millers dispute this, insisting that sugarcane attains the required sucrose level only by November. Higher sucrose recovery means greater returns for wealthy millers.

Since the enactment of the Sugar Factories Control Act 1950, the sugarcane rate and crushing season have been notified in October. This decades-old practice ended in 2009, when the Sindh government amended the 1950 Act, allowing millers to start crushing no later than Nov 30. No independent research was conducted, and no consultation was held with farmers, to determine whether sugarcane matures in October or later. Millers have also deviated from the Nov 30 timeline, starting crushing as late as December.

Likewise, the FY27 wheat season is worrying growers after last year’s experience. After a one-year gap in FY25, the Sindh government decided to procure 1m tonnes of wheat in FY26 at a support price of Rs3,500 per 40kg, but the food department failed to meet the procurement target. Sindh Agriculture Minister Mohammad Bux Mahar promised a few days ago the “best of the best” support price, arguing that last year’s rate was inadequate and had prompted farmers to sell their harvest in the open market for better returns.

The Sindh government, however, has not notified a sugarcane rate for the last two years. Growers believe government indications suggest the rate may not be fixed in FY27 either, making it the third consecutive year without an official price. Sugarcane’s rate was last fixed at Rs425 per 40kg in FY24.

The situation surrounding the two major crops also raises questions about the government’s intended deregulation policy and its approach to price fixation. It appears the government has not delved deeply enough into the dynamics of deregulation to ensure its implementation in letter and spirit.

Cash-rich middlemen manipulate prices, much to the farmers’ chagrin. It is paradoxical that while farmers complain of receiving lower prices for wheat, consumers are paying more these days for a kilogramme of flour. The government also plans to import grain.

Apparently, the government has refrained from fixing the sugarcane rate to demonstrate compliance with the International Monetary Fund (IMF) programme, which requires it to let the market determine prices. This has confused farmers, as the government fixed wheat’s support price in FY26 while operating under the IMF’s discipline, but did not fix sugarcane’s price despite this being a legal requirement under the 1950 Act.

“We are told privately that the government will not fix the sugarcane price in FY27,” said Sindh Chamber of Agriculture senior vice president Nabi Bux Sathio. He said a delay in the crushing season would require farmers to continue providing water to the sugarcane crop at the expense of wheat until mills start crushing. Last year, he said, millers manipulated prices simply by delaying the season.

Sindh Abadgar Board president Mahmood Nawaz Shah said the Sindh government had opposed deregulation of the sugar market, while the federal government was yet to deregulate it. “But the Sindh government refuses to fix the price of sugarcane, thereby leaving the price and commencement of the sugarcane season at the mercy of the powerful Pakistan Sugar Mills Association (PSMA),” he asserted.

He explained that neither growers nor consumers had benefited from the two crops. Growers have borne Rs1 trillion in losses from the wheat crop alone. “Wheat was mostly bought by middlemen for Rs3,000-Rs3,200 last season because the food department started procurement as late as April. Now the government is going to spend foreign exchange to import wheat,” he said.

Similarly, he noted, every Rs10 per kg increase in sugar’s price last year translated into Rs58 billion in additional profit for millers across Pakistan. The price of sweetener increased from Rs140 to Rs200, but the increase did not benefit farmers in terms of the procurement price. Sugar exports were now being allowed at PSMA’s insistence, he said.

“This puts a question mark on whether deregulation will be viable or whether it will mean total control by PSMA. If the government focuses on deregulation, then there should be no import or export restrictions. We doubt complete deregulation will work in the presence of lobbies,” he said.

After failing to procure the wheat crop this year, the Sindh government was hard-pressed to import 300,000 tonnes of wheat through the federal government to meet consumer demand as flour prices skyrocketed.

Meanwhile, at a Sept 14 meeting, the federal government said it was willing to initially allow exports of only 200,000 tonnes of sugar after the PSMA claimed a surplus of 1.03m tonnes and another bumper crop was crushed. In addition to the 200,000 totos, internal tendering was underway for the re-export of 108,000 tonnes that the government had earlier imported. PSMA continues to insist that the government allow exports of 1m tonnes.

PSMA has cumulative stocks of 7.97m tonnes against nationwide monthly sugar consumption of 560,096 tonnes, or 6.72m tonnes annually. It believes that, based on monthly domestic sugar consumption, 1.25m tonnes of sweetener will still be in surplus by mid-November.

“We are optimistic about another bumper crop year, with a 15pc increase in sugarcane production that may end up in 8.5m tonnes of sugar production by 2027. With this scenario, exports are inevitable to enable millers to buy the fresh crop from farmers at a reasonable and fair price,” PSMA has said.

The writer is a Dawn staffer

Published in Dawn, The Business and Finance Weekly, September 21st, 2026