KARACHI: The upcoming sugarcane and wheat seasons have renewed debate over crop prices, government procurement and the future of agricultural deregulation.
The two major crops enter their seasons one after another. The government usually fixes the sugarcane minimum support price around October, with crushing starting in November.
Authorities generally set the wheat support price in November or December. Farmers begin harvesting the crop by late February.
As the kharif season ends, farmers have started demanding clear support prices for both crops.
The Sindh Abadgar Board and Sindh Abadgar Ittehad have urged the government to set the wheat support price at Rs4,500-Rs5,000 per 40kg for FY27.
They have also demanded a sugarcane price of Rs500-Rs600 per 40kg. Farmers say the proposed rates would help cover their production costs.
Sindh produced 2.02 million tonnes of sugar in FY26 after mills crushed 19.18 million tonnes of sugarcane. Sugar recovery stood at 10.38 per cent.
In FY25, mills produced 1.62 million tonnes of sugar after crushing 16.4 million tonnes of sugarcane. Sugar recovery stood at 9.48 per cent.
Dispute Over Sugarcane Price
Farmers want the government to fix the sugarcane price in September because the crop reaches maturity by October, according to growers.
Millers disagree. They argue that sugarcane reaches the required sucrose level in November.
Higher sucrose recovery gives mills greater returns from the same quantity of sugarcane.
The Sugar Factories Control Act 1950 has traditionally linked the notification of sugarcane prices and the crushing season to October.
The Sindh government amended the law in 2009. The amendment allowed mills to begin crushing no later than November 30.
However, farmers say authorities did not conduct independent research or consult growers before changing the timeline.
Mills have also started crushing later than the November 30 deadline in some years, with operations beginning as late as December.
Wheat Farmers Remain Concerned
The upcoming wheat season has also raised concerns among growers following last year’s experience.
After a one-year gap in FY25, the Sindh government decided to procure one million tonnes of wheat in FY26.
The government set the support price at Rs3,500 per 40kg. However, the food department failed to meet its procurement target.
Sindh Agriculture Minister Mohammad Bux Mahar recently promised a “best of the best” support price for the new season.
He said last year’s rate failed to provide adequate returns and pushed farmers towards open-market sales.
The Sindh government has not fixed a sugarcane price for the past two years. Growers fear it may again leave the rate unannounced in FY27.
If that happens, FY27 would become the third consecutive season without an official sugarcane price.
The government last fixed the sugarcane price at Rs425 per 40kg in FY24.
Farmers Question Deregulation Policy
The situation has also raised questions about the government’s approach to agricultural deregulation.
Farmers argue that weak price regulation allows middlemen to influence market prices.
Growers have also pointed to a gap between wheat prices and flour prices. Farmers say they receive low prices for their produce while consumers continue to pay more for flour.
The government also plans to import grain to meet domestic demand.
Farmers believe the government has avoided fixing the sugarcane price to align with the International Monetary Fund programme, which encourages market-based pricing.
However, the approach has created confusion among growers.
The government fixed a wheat support price in FY26 while operating under the IMF programme. At the same time, it did not fix the sugarcane price despite the legal framework under the 1950 Act.
Growers Fear Delayed Crushing
Sindh Chamber of Agriculture Senior Vice President Nabi Bux Sathio said farmers had received private indications that the government would not fix the sugarcane price in FY27.
“We are told privately that the government will not fix the sugarcane price in FY27,” Sathio said.
He said a delay in the crushing season would force farmers to keep supplying water to sugarcane while also preparing their wheat crop.
Sathio said millers delayed the crushing season last year and used the delay to influence sugarcane prices.
Sindh Abadgar Board President Mahmood Nawaz Shah said the Sindh government had opposed deregulation of the sugar market.
He said the federal government had yet to deregulate the sector.
However, Shah argued that the Sindh government’s decision not to fix a sugarcane price left growers at the mercy of the Pakistan Sugar Mills Association (PSMA).
He said neither farmers nor consumers had benefited from the existing system.
According to Shah, wheat growers suffered losses of around Rs1 trillion.
“Wheat was mostly bought by middlemen for Rs3,000-Rs3,200 last season because the food department started procurement as late as April,” he said.
He added that the government now planned to spend foreign exchange on wheat imports.
Shah also pointed to the increase in sugar prices.
He said every Rs10 per kilogramme increase in sugar prices last year generated an additional Rs58 billion in profits for sugar mills across Pakistan.
Sugar prices increased from Rs140 to Rs200 per kilogramme, but the increase did not translate into higher procurement prices for farmers, he said.
Shah also said the government had started allowing sugar exports at the PSMA’s insistence.
“This puts a question mark on whether deregulation will be viable or whether it will mean total control by PSMA,” he said.
“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 added.
Wheat Imports Add to Concerns
After failing to procure enough wheat, the Sindh government has faced pressure to import 300,000 tonnes through the federal government.
The move aims to meet consumer demand after flour prices increased sharply.
Meanwhile, the federal government said at a September 14 meeting that it would initially allow exports of 200,000 tonnes of sugar.
The PSMA had reported a surplus of 1.03 million tonnes after mills processed another bumper sugarcane crop.
The government also started internal tendering for the re-export of 108,000 tonnes of sugar that it had previously imported.
The PSMA continues to seek permission to export one million tonnes of sugar.
The association says sugar mills hold cumulative stocks of 7.97 million tonnes.
It estimates monthly domestic sugar consumption at 560,096 tonnes, or around 6.72 million tonnes annually.
Based on current consumption, the PSMA expects a surplus of around 1.25 million tonnes by mid-November.
The association also expects another bumper crop.
“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,” the PSMA said.
The association said higher production would make exports necessary and help mills purchase the new sugarcane crop from farmers at what it described as reasonable and fair prices.
