How Pakistan’s tea habit brews an economic storm

Tea, it’s more than just a morning ritual in Pakistan. It’s woven into conversations, culture, ceremonies, and daily endurance. Yet behind every teacup lies a complex interplay of economics, trade, and shifting consumer behaviour. Recent data paint a vivid picture: tea in Pakistan is not only a beloved beverage but also a large and growing import bill, with implications for trade balance, domestic policy, and perhaps, even public taste.

Rising import bills amid economic headwinds

In Fiscal Year (FY) 202425, Pakistan imported 246,514 metric tons of tea for USD629 million, marking a drop in volume of about 4.2 percent compared to the prior year, even as costs remained high”, according to the Trade Development Authority of Pakistan.

Media reports that during the first eight months of FY 202324 (July to February), tea imports rose by 10.13 percent in quantity compared to the same period the year before. Pakistan imported roughly 180,509 metric tons worth USD436.68 million, up from 161,056 tons valued at roughly USD395.49 million. Meanwhile, in the first half of FY 202324 (JulyDecember), imports stood at about 139,751 metric tons, costing USD336.42 million, up from 128,068 tons and USD318.80 million over the same months a year earlier.

These figures reflect two pressures: growing consumption on one side, and exchangerate depreciation and inflation on the other, which push up the cost in rupees even when quantities are static or slightly falling.

Consumption patterns & cultural anchors

Pakistan remains among the world’s top importers of tea. Tea is a staple: a drink consumed across income classes, in urban and rural settings alike. It’s part of hospitality norms, street culture, and even formal gatherings. Despite efforts here and there to promote alternatives (green tea, herbal infusions, local cultivation trials), most of the demand is still for strong black tea blends, often imported. Consumption trends are further sustained by population growth, especially in cities, rising disposable incomes (even if under pressure), and the embedded habit of daily multiple cups. Even though FY2425 saw a slight drop in imported volume compared to earlier years, the total cost remained high, owing to price escalations in particular.

Economic implications & trade imbalance

The high tea import bills contribute noticeably to Pakistan’s trade deficit. In many months, tea imports alone cost tens of millions of dollars, mounting pressure on foreign exchange reserves. For instance, in July 2025, tea imports cost USD41.994 million for 19,994 metric tons, according to Startup Pakistan.

Efforts to curb importcost pressures include monitoring food and beverage import bills, considering import duties, and encouraging domestic cultivation. But those measures face limitations: suitable land, climate constraints, high startup costs, and the time needed to scale production.

Inflation adds another layer: as global tea prices increase, local consumers feel the pinch. Even if less tea is imported, the rupee value can rise heavily, which translates into steeper prices in the local market. The high cost of living, rising utility bills, and other inflationary pressures mean that price hikes are more burdensome for many.

Trends and possible turning points

Volume vs. value divergence: The recent drop in volume (in FY2425) with still-high import bills suggests that while quantity may sometimes stabilize or dip, the cost remains elevated due to global market prices or currency depreciation.

Seasonal & monthly variations: Imports and costs often spike or drop monthtomonth. For example, July 2025 saw 19,994 tons worth USD41.994 million imported, a slight rise from the same month in the previous year. But June had different figures.

Currency impact: The rupee’s decline means that even if global prices are stable, the import cost in local currency swells. This makes tea more expensive domestically and increases pressure on importers, retailers, and ultimately consumers.

Exploration of local cultivation: There have been pilot projects and small-scale efforts in regions like Shinkiari (in Khyber Pakhtunkhwa) to cultivate tea. But they are far from replacing the large import volumes. Soil, climate, scale, and investment are real constraints.

Policy responses & public sentiments: Some government officials have publicly urged citizens to reduce tea consumption marginally, for example, “cutting down by a cup or two” to ease foreign currency burdens. Such suggestions, however, tend to meet cultural resistance because tea is deeply ingrained in daily life.

Looking ahead: balancing taste, trade, and sustainability

To bring down costs without compromising the love affair Pakistan has with tea, several strategies could help:

Scaling local production: If more land in hilly, favourable climates can be allocated, and quality clones or strains used, domestic production could slowly reduce import dependency.

Diversification of import sources: Relying too much on limited countries makes Pakistan vulnerable to supply shocks or price hikes. Exploring new trade partners, better trade deals, and long-term contracts could provide more stability.

Value addition domestically: Brands in Pakistan can invest more in blending, packaging, and quality branding rather than merely being resellers of bulk tea to retain more value locally.

Consumer awareness & substitution: Encouraging herbal teas, or lower cost alternatives, especially in certain segments, might help moderate the import growth. But any such policy must navigate cultural preferences with sensitivity.

Fiscal and monetary policy support: Stabilising the rupee, negotiating favourable import tariffs, and ensuring supply chains (logistics, storage) are efficient can help reduce waste and cost pass-through.

Tea in Pakistan is not just an aromatic indulgence; it’s an anchor of culture, a metric of consumer behaviour, and a vector of macroeconomic stress. The recent trends reveal a tension: while import volumes may fluctuate, the cost burden continues to mount, fueled by global price shifts, currency depreciation, and insatiable demand.

For policymakers, industry actors, and consumers, the challenge is clear: how to sip without tipping over the economic scales.

Copyright Business Recorder, 2025