Annual Consumer Price Index Increases by 4.1% Compared to Last Year
In July 2025, sugar prices in Pakistan experienced a significant surge, rising by 29.43% year-on-year and 6.11% month-on-month. This steep increase was primarily due to a decline in domestic sugar production and large-scale sugar exports, which created a supply shortage.
Sugar production dropped from 6.8 million tons in the previous year to 5.8 million tons in the current year, leading to a supply deficit [3][4]. At the same time, the government allowed the export of 765,000 metric tons of sugar, based on claims of surplus stock, when prices were around Rs140/kg. Following these exports, prices surged by approximately Rs56 per kilogram, contributing to a near 40% increase in prices [3][4].
To address the market instability, the government approved the import of 500,000 metric tons of sugar in July 2025. However, despite these measures, retail prices continued to escalate, reaching or surpassing Rs190–200 per kilogram in many cities, with nationwide averages around Rs188.44 [2]. This price escalation has caused public frustration.
Other factors contributing to the price spike include alleged hoarding and profiteering by market actors, as well as insufficient enforcement of price regulations [2]. The Ministry of National Food Security and Research set the ex-mill sugar price at Rs165 per kilogram, an increase of Rs25 from the previous fixed price, as part of efforts to regulate prices [1].
Meanwhile, other food prices in July 2025 revealed a mixed picture. The Consumer Price Index (CPI) inflation increased by 4.1% year-on-year and 2.9% month-on-month, while the Whole Price Index (WPI) inflation decreased by 0.5% year-on-year but rose to 1.2% month-on-month [5].
In the rural areas, the CPI inflation increased by 3.5% year-on-year and 2.2% month-on-month. Prices of essential food items such as onions, potatoes, and wheat products decreased, with wheat flour prices dropping by 21.52% year-on-year [5]. The Sensitive Price Index (SPI) inflation decreased by 0.9% year-on-year but increased by 3.1% month-on-month [5].
In terms of non-food items, core urban trimmed inflation increased to 5.1% year-on-year, while non-food non-energy urban core inflation increased to 7.0% year-on-year [5]. However, the CPI inflation for rural and urban areas remained relatively lower, with the rural CPI inflation at 3.5% year-on-year and the urban CPI inflation at 4.4% year-on-year [5].
Sources: 1. The News International 2. Dawn 3. Geo News 4. Express Tribune 5. Pakistan Bureau of Statistics
Financial analysts are closely monitoring the situation, as the steep increase in sugar prices indicates a potential trend of inflation in Pakistan's business sector, with the Consumer Price Index (CPI) inflation rising by 4.1% year-on-year in July 2025. This inflation index, combined with allegations of hoarding and profiteering, has raised concerns about the effectiveness of price regulations in the finance industry.
