ISLAMABAD: Tobacco farmers across Pakistan are facing growing financial uncertainty as delays in the announcement of the Minimum Indicative Price (MIP) have coincided with reports of widespread distress sales and payment issues during the ongoing tobacco purchasing season.
Under Section 11 of the Tobacco Marketing Rules, 2016, tobacco companies purchase tobacco according to their declared requirements for various grades and types of tobacco. However, concerns have emerged for farmers who have produced tobacco beyond the quantities required by companies. With limited market options available, many growers are reportedly under pressure to sell their produce at prices significantly below government benchmarks.
The issue has been compounded by the absence of an officially notified Minimum Indicative Price (MIP) for the 2026 crop. Under Section 2(i)(3) of Martial Law Order No. 487, tobacco companies are required, prior to the commencement of the buying season, to prominently display both the Weighted Average Price (WAP) and the Minimum Indicative Price announced by the Pakistan Tobacco Board (PTB). While the WAP has been publicized, the MIP for the current crop has yet to be announced by the PTB.
The matter was discussed at the Economic Coordination Committee (ECC) meeting held on 7 September 2026. According to ECC’s press release, a proposal regarding the MIP was presented by the Pakistan Tobacco Board after months of delay. However, the proposal was not approved by the forum and was deferred for further consideration. The ECC directed PTB officials to resubmit the proposal along with a more comprehensive and justifiable analysis.
Meanwhile, growers allege that the uncertainty surrounding official pricing has created conditions that allow some buyers and dealers to procure tobacco at prices below expected market levels. Farmers have also raised concerns regarding delays in payment settlements, further increasing financial pressure on households that rely heavily on tobacco cultivation as a source of income.
Meanwhile, the Pakistan Tobacco Board has warned 57 tobacco companies to complete their stipulated tobacco purchases within the prescribed timeframe, failing which strict action will be taken against them for violating the rules and regulations. The companies have been cautioned that non-compliance with the purchase requirements could result in their blacklisting.
Copyright Business Recorder, 2026
Comments