Much is made in media of political barons dominating the sugar sector. And while those belonging to political families have an equal right to engage in commercial enterprise; claims of political ownership are often shrouded in mystery, and more often than not shunned.

Politicians also get off denying allegations easily because news in the media is often either based on rumours or dated information. After all, ownership in the sugar industry often changes hands very quietly, often times between politicians. But with a little bit of secondary research, it is not entirely impossible to measure the extent of political influence in the sector.

Turns out, of the 90 active members of Pakistan Sugar Millers Association (PSMA), a large number of units does belong to sponsor families/groups with a varying degree of political affiliations, past or present. These include, for example, current and past members of federal and provincial cabinets during the last twenty years, senators, and MLAs.

A note of clarification nevertheless is necessary. Of the 38 units identified as politically influential (PI), a degree of liberty has been exercised with respect to two groups of privately-owned entities. First, are the nine units alleged to be under the ownership of Omni group (by the JIT report), with beneficiary ownership resting with Zardari family; and second, Sarfaraz Khan family which has the largest market share in KP.

In the case of former, the JIT report, of course does not constitute a final verdict, and may be proven false in a court of law. Two mills belonging to private individuals under investigation with NAB have also been included by virtue of association, but have been highlighted accordingly. On the other hand, Abbas Sarfaraz group currently has no discernible political affiliation, but held portfolios in federal cabinet twice during the Musharraf era.

Thus, it is important to note that the classification as PI has elements of subjectivity, but one arbitrary yet useful rule of thumb may be to measure whether: a) sponsor group’s commercial interests are primarily concentrated in sugar sector and b) whether its related parties (such as sponsor directors or significant shareholders) have held any official position during the past twenty years. The definition, however, remains open to dispute.

Who has been excluded? Arguably, almost every industrialist family worth its salt exercises some degree of political influence in Pakistan. But, at least 30 units owned by 20 distinct sponsor families have no explicit official connections: these include, for example, Shezan, Dawood Habib, Crescent, Fatima, Deewan and Thal Industries, among others.

Thirteen mills have been excluded as their directors/significant shareholders were identified based on SECP documents, however, the declared related parties appeared oblique with no other known major commercial interests. This to say that if benaami ownership exists in sugar industry, chances are the accompanying table may not be exhaustive. BR Research was unable to locate ownership information for additional 9 units despite best efforts. Thee nine control a cumulative share of 2.5 percent in total domestic production.

The findings? Put together, 38 PI units produced 46 percent of total domestic output of sugarcane-based sugar in outgoing marketing year 2017-18. Of these, the largest of course is JKT group, with 16 percent market share; but in its defence, the beneficial owner makes no effort to hide his commercial interests.

The PTI scion is closely followed by Omni group at 5 percent share; considering the group’s judicial troubles recently, it remains to be seen whether it will continue to be the placeholder for runner-up position in coming years. Third on the list is erstwhile Ittefaq family, whose interests are further, fragmented between Haseeb Waqas, Abbas Sharif, and Nawaz/Shabaz branches of the family? Put together the family owns 6 units, with a puny market share of 3.5 percent.

Sugar industry may have its barons, but it is no giant compared to other productive sectors of the economy such as cement, real-estate or banking. In a market so fragmented, one wonders what do politicos have to gain from shrouding their (relatively) humble commercial interests in so much mystery. If political developments of the past two years are any guide, transparency has cost market leader very little. The truth, as they say, does set you free, at least in the sugar industry