Alarming figures show food imports rising 15% to $7.09 billion, while food exports plunged 34% to $3.80 billion.
Key Takeaways
· Pakistan’s agri‑food trade deficit has become structural, driven by systemic policy distortions rather than cyclical demand.
· Imports of palm oil (+17%), pulses (+24%) and sugar (+6,500%) soared, while non‑basmati rice (-47%) and vegetables (-53%) collapsed.
· A 3–5 year stable pricing framework, crop diversification, and cold‑chain investment are needed to reverse import dependence.
Money Matters Monitoring — : Pakistan’s food trade gap has shifted from a temporary cyclical issue to a deeply entrenched structural problem, with imports surging and exports contracting sharply in the first nine months of fiscal year 2026 (9MFY26), according to leading economist Dr Khaqan Hassan Najeeb.
In a detailed analysis posted on X, Dr Najeeb, a former Advisor to the Ministry of Finance and expert in economic and institutional reform, highlighted alarming figures showing food imports rising 15 per cent to $7.09 billion, while food exports plunged 34 per cent to $3.80 billion.
Key drivers of the import bill included palm oil, which rose 17 per cent to $3.02 billion, pulses increasing 24 per cent to $624 million, and sugar imports exploding by a staggering 6,500 per cent due to policy decisions. On the export side, non-basmati rice fell 47 per cent, vegetables dropped 53 per cent, and the decline was broad-based across most categories, with only meat, fish and fruit showing resilience.
“With around 40–45 per cent of the labour force tied to agriculture, this divergence reflects systemic policy distortion, not mere demand pressure,” Dr Najeeb wrote.
The economist outlined a clear diagnosis of the underlying problems:
• Incentive asymmetry that protects margins for traders and investors while shifting price risk onto farmers
• Long-standing policy bias favouring wheat and sugarcane at the expense of oilseeds and pulses
• A reactive state approach that uses imports to address shortages only after production failures occur
Key drivers of the import bill included palm oil, which rose 17 per cent to $3.02 billion, pulses increasing 24 per cent to $624 million, and sugar imports exploding by a staggering 6,500 per cent due to policy decisions.
• Credibility shocks from past episodes, particularly in wheat, that have weakened farmer expectations
• Persistent value chain gaps, including 20–30 per cent post-harvest losses and a weak processing and export ecosystem
• Governance risks stemming from overlapping roles in regulation and facilitation
These issues, he argued, are leading to a gradual erosion of domestic supply capacity and rising dependence on imports.
Dr Najeeb called for a “credible reset” through a comprehensive reform agenda. Among his recommendations:
• Re-anchoring incentives with predictable pricing and a shift towards crop diversification
• Committing to a stable 3–5 year trade and pricing framework to restore policy credibility
• Rebalancing public support, including subsidies and water allocation, towards oilseeds, pulses and high-value crops
• Redirecting finance to boost productivity through better seeds, mechanisation, storage and irrigation efficiency
• Attracting private investment into processing, storage and supply chains beyond the traditional rice sector
• Building export-competitive value chains in rice, meat and horticulture with strong emphasis on quality and traceability
• Investing in cold chains and logistics to reduce post-harvest losses
• Introducing risk management tools such as insurance, warehouse receipts and hedging
• Aligning agriculture with climate realities through water-efficient practices and resilient seeds
On the export side, non-basmati rice fell 47 per cent, vegetables dropped 53 per cent
“Unless incentives are realigned toward producers, Pakistan’s food import bill will continue to rise structurally — embedding import dependence rather than correcting it,” Dr Najeeb warned. “Post–Middle East conflict, external food reliance is not just costly — it is strategically untenable.”
He concluded by reflecting on broader lessons for developing economies, noting that sustained growth does not come from targeted interventions and picking winners, but from system-wide dynamism driven by competition, firm entry and exit, and investment under stable rules.
Analysts say the widening agri-trade imbalance poses long-term risks to Pakistan’s food security, rural employment and overall economic stability, underscoring the urgent need for deep-rooted policy reforms rather than short-term fixes.
Disclaimer
This report is for informational purposes and does not necessarily reflect the views of ‘Money Matters Pakistan’. We welcome any corrections or alternative viewpoints from our readers to ensure a balanced perspective.
