Pakistan expected to import 3.5 million tons of wheat as domestic output falls

Pakistan is expected to again tap global markets for the import of around 3.5 million tons of wheat as its domestic output is likely fall short of the government’s target, experts told Nukta.

Wheat has been sown on 22.07 million acres, with an expected production of 27.9 million metric tons (MT), according to a report released by the Ministry of Finance on February 27.

The utilization of farm inputs is progressing effectively, supported by government initiatives to enhance agricultural productivity through the provision of improved seeds, agricultural credit, farm machinery, and fertilizers, the report said.

During five months of the current fiscal year, funds disbursement to farmers rose by 8.5% to PKR 926 billion ($3.4 billion), up from PKR 853 billion during the same period last year.

Pakistan set funds disbursement for farmers for the year ending June 30, 2025 to PKR 2,572 billion, the report said.

Farmers facing financial crisis

Abid Suleri, an Islamabad-based economist, told Nukta it is difficult to assess at this juncture how much the wheat shortage would be as farmers have little choice but to switch to other rabi crops (which are sown in winter).

He explained that after not being able to sell the wheat at the promised price, farmers are also suffering losses in cotton production. Consequently, many of them are facing a financial crisis.

Suleri supported the government’s move not to intervene in the grain market and let demand and supply situations decide the price pattern. However, he said that abrupt disbanding of the support price for wheat last year was not fair for farmers who were promised a minimum support price.

“The government was in a fix as the International Monetary Fund had asked the government to end the minimum support price system so they had to take an abrupt decision,” Suleri added.

The MSP, widely used in many developing countries, serves two key purposes: it guarantees farmers a minimum return on their produce and stabilizes the production and supply of essential crops.

While the former aims to protect farmers from global price fluctuations and distress sales during periods of surplus, the latter safeguards consumers from supply-demand imbalances and market inefficiencies.

'Inferior quality'

Wheat expert Atif Ghaffar said that to meet local demand, the country has to import wheat because leftover stocks are of inferior quality as most of the quality wheat has been consumed before the arrival of the new crop.

The market has been currently stable but all depends on whether the province-owned companies would lift wheat stocks timely.
It is difficult to assess how much wheat would be imported but considering the drop in quality wheat production, the country might import wheat, Ghaffar said.

Wheat import

The government during the seven months ended Jan. 31, imported a miniscule amount of 127 MT of wheat as compared with 1.980 million MT imported in the same period last year, data from the Pakistan Bureau of Statistics, the government-run authority which compiles imports and exports shipments of the commodities, showed.

Meanwhile, Pakistan wheat imports in the year ended June 30, 2024 amounted to 3.536 million MT as compared with 2.401 million MT of the corresponding year, showing a jump of 47%. The wheat imported in value terms amounted to $1.03 billion as compared with $1 billion of the preceding year, the government data said.

Khalid Khokar, president Pakistan Kissan Ittehad, said that farmers last year suffered substantially — the wheat support price was fixed at PKR 3900/40 kg whereas it reached a high of PKR 4500/40 kg.

But before the harvesting of wheat crop, state-run companies stopped purchases of the grain which led to a decline in wheat prices to PKR 2900/40 kg, resulting in a PKR 1,000 billion loss to farmers.

“This has discouraged farmers from sowing more wheat. However, we can assess the exact decline in wheat production only after final figures arrive. Any fall would hit the economy for sure,” Khokar said.

Independent analysts said they foresee a 12-15% decline in production from last year's crop size of 32 million tons, which might force the government to import wheat.

The government state run companies bought 56% of wheat from the farmers — amounting to 2.887 million MT — whereas target fixed was 5.150 million MT, the government data said.

Pakistan wheat consumption stood around 31 million tons, the government data said.