Can Someone Explain Why Govt Buys Expensive Sugar to Sell It Cheaper?

There is something terribly wrong with the government's sugar re-exporting story.

Key points

• He then praised Ahsan Iqbal, Awais Leghari, Ali Pervaiz Malik and Musadik Malik for maintaining that grace despite political disagreements.
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• But ex-Finance Minister Miftah Ismail has shared a rather graphic but real story behind the re-export order.
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• Tarar notes sugar was exported in 2024 as Pakistan had surplus stocks.

There is something terribly wrong with the government's sugar re-exporting story. Information Minister Attaullah Tarar's latest response to a former finance minister's remarks makes the government's side of the story too tough to ignore. And defend.

Tarar notes sugar was exported in 2024 as Pakistan had surplus stocks. He notes sugar was imported last year as sugarcane production was lower. He now notes 100, 000 tons of that imported sugar is being re-exported as market conditions are stable.

On the surface, this sounds perfectly reasonable. But ex-Finance Minister Miftah Ismail has shared a rather graphic but real story behind the re-export order. Optics: The Independence Day Image Pakistan Couldn't Ignore. Exporting Imported Sugar Cheaper Than Original Cost.

Notably, the former finance minister notes the government's decision to allow sugar exports pushed the domestic rate up by around Rs. 50 per kg. He then asks why the administration chose to import sugar through the Trading Corporation of Pakistan (TCP), instead of allowing the private sector to import it.

More importantly, he shared that TCP purchased sugar at costs higher than the international market. Now the same sugar is being re-exported at lower rates. This is where Attaullah Tarar's explanation becomes tough to defend.

If sugar was purchased at a higher rate and is now being sold abroad at a lower cost, Pakistan takes the loss. The country paid expensive dollars to bring the commodity in and is now giving up foreign exchange value by selling it cheaper. That is not a minor technicality. It is the central question.

Why was the sugar purchased at that rate in the first place? Tarar's response does not answer that; 0%.

He additionally mentioned FBR's further Rs. 60 billion collection from the sugar industry as evidence of enforcement. But Miftah's response exposes another significant point. Higher sugar rates themselves rise sales tax collection.

With an 18 percent sales tax, a Rs. 50 per kg growth in the taxable rate means Rs. 9 more tax per kilogram. Miftah additionally pointed to the excise tax imposed on the sugar-consuming industry and FBR's Track and Trace system.

So the Rs. 60 billion collection is certainly major. But it cannot prove that the government's sugar policy protected consumers. The administration needs to explain the complete chain.

Sugar was exported. Domestic rates climbed. Sugar was afterwards imported through TCP. Miftah notes it was purchased above international rates.

TCP could not sell all of it. And now 100, 000 tons is being re-exported. What was the total cost to Pakistan? This is the number the public needs to see.

For context, the administration can settle the problem particularly easily. Publish TCP's purchase cost, the international benchmark at the time, its domestic selling rate, the current re-export cost and the total foreign-exchange impact.

That would end the argument. Sadly, the Information Minister accused Miftah of distorting facts and misleading individuals. Miftah's response was different in tone. And defensible. He did not simply throw the same accusation back.

Miftah challenged Tarar to identify even one fact in his original statement that was wrong and then went through the disputed points one by one. There was additionally a revealing personal remark at the end.

According to Miftah, tarar employed to call him "Miftah bhai" but now called him "Mr Ismail." He noted governments come and go and politicians should not stop acting with grace.

I can personally attest to the grace and professionalism of the four public figures Miftah has named. Their official decisions and policy choices, of course, are a separate matter. Govt to Export 108, 000 Tons Surplus Sugar.

Responding respectfully to Tarar's bold claims was perhaps the strongest part of Miftah's response. He could have responded to the Information Minister's tone with the same level of personal hostility. Instead, he created the disagreement concerning policy while pointing out, without much drama, that the tone had changed.

And that brings us back to the sugar matter. The administration has explained why it states sugar was exported and why it notes imports became necessary. It has additionally explained why it is now re-exporting the surplus.

It still needs to explain whether Pakistan purchased that sugar too expensively and is now selling it too cheaply.

Until that question is answered with actual numbers, calling the criticism "distortion" does not create the bizarre problem disappear. Stay Connected with ProPakistani.

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For now, can Someone Explain Why Govt Buys Expensive Sugar to Sell It Cheaper? Remains the part of the story worth watching, and further updates are likely as more details are confirmed.