Pakistan is now spending billions of dollars importing food products that a functioning agricultural economy should either be producing efficiently or managing responsibly. This is a dangerous economics behind Pakistan’s rising food import bill.
The latest trade figures for the first 10 months of FY2025-26 expose a troubling structural weakness within Pakistan’s economy. The country’s food import bill has risen by 13.81 percent to USD 7.848 billion, while exports of raw food products have fallen sharply by over 32 percent to USD 4.19 billion.
This widening gap between food imports and exports is not merely an agricultural issue. It directly affects Pakistan’s fiscal deficit, current account stability, inflation trajectory, exchange rate vulnerability, and long-term economic sovereignty.
At a time when the country remains dependent on IMF oversight, external financing rollovers, and repeated fiscal adjustments, rising food imports represent a dangerous leakage of scarce foreign exchange reserves.
The most glaring example of policy failure remains sugar.
The country first permits sugar exports under the familiar justification of “surplus production” and excess inventories. Months later, the same country began importing sugar at elevated international prices to contain domestic shortages and soaring retail prices.
This recurring cycle is no longer accidental.
It has become a predictable pattern driven by weak governance, regulatory capture, and politically influential lobbying.
At the start of every crushing season, sugar mill owners and sector representatives project bumper output and comfortable stock availability. Export permissions are granted accordingly. Once exports proceed and domestic inventories tighten, retail prices begin rising sharply. Public pressure mounts, accusations of hoarding emerge, and eventually the government is forced into emergency imports using precious foreign exchange reserves.
The economic consequences are severe.
Private players benefit from export earnings when global prices are favourable, while the state absorbs the financial cost of stabilising domestic markets later through imports. In practical terms, profits remain privatised while losses are transferred to the public.
Pakistan reportedly imported more than 309,000 tonnes of sugar during July-April FY26 after imports were almost negligible a year earlier. The sugar import bill rose to nearly USD 175 million following shortages created after exports and supply disruptions.
What makes this even more irrational is that sugar is not an unavoidable strategic import. Pakistan is among the region’s major sugarcane producers. The problem therefore is not merely production capacity; it is the absence of transparent stock monitoring, credible crop forecasting, disciplined export management, and insulation of policymaking from sectoral influence.
Sugar also represents another deeper contradiction within Pakistan’s agricultural economy.
The second major contributor to the food import bill is edible oil.
Pakistan spends billions annually on importing palm oil and soybean oil because domestic oilseed cultivation remains critically underdeveloped. Palm oil alone accounted for over USD 3.3 billion in imports during the review period, making it the country’s single largest food import category.
Despite decades of discussion about agricultural reform and import substitution, Pakistan has failed to build a serious oilseed development strategy. Crops such as sunflower, canola, and soybean have never received policy priority comparable to politically connected sectors.
As a result, the country remains exposed to international edible oil price fluctuations and exchange rate depreciation.
Beyond sugar and edible oil, several other food imports continue exerting pressure on Pakistan’s external account.
Pulses remain among the largest imported food items because local production consistently falls below consumption demand. Tea imports also continue consuming substantial foreign exchange despite repeated policy rhetoric about reducing dependence on non-essential imports.
Soybean products, dry fruits, milk products, and occasionally wheat imports further contribute to the pressure depending on domestic crop performance and seasonal shortages.
The larger picture is deeply concerning.
A country with vast agricultural land, one of the world’s largest irrigation systems, and a labour force heavily dependent on farming is steadily becoming more import-dependent in food.
At the same time, food export performance is weakening.
Rice exports — traditionally a major source of foreign exchange earnings — have shown visible stress. While basmati rice exports performed strongly in April with substantial gains in both quantity and value, non-basmati exports declined sharply.
This decline matters because non-basmati rice contributes heavily to export volumes and broader market penetration.
The contraction suggests growing regional competition, pricing disadvantages, inconsistent quality standards, rising input costs, water constraints, and declining competitiveness in international markets.
If food imports continue rising while agricultural exports stagnate or decline, Pakistan will face worsening external financing pressures in the coming years.
The fiscal implications are equally serious. Higher imports increase pressure on the current account deficit, which eventually compels additional borrowing.
In this manner, food insecurity gradually evolves into fiscal insecurity.
Pakistan therefore requires more than temporary crackdowns or reactive import decisions. It requires structural reform in agricultural governance.
Export permissions for essential commodities such as sugar and wheat must be linked to independently verified stock audits rather than projections supplied by industry groups.
Whereas, agricultural incentives must shift toward strategically important crops that reduce import dependence, particularly oilseeds and pulses.
Pakistan urgently needs investment in storage infrastructure, seed technology, mechanisation, water efficiency, crop forecasting systems, and supply-chain management.
Finally, agricultural policymaking must be protected from vested-interest influence.
No economy can achieve sustainable fiscal stability when commodity cycles are repeatedly manipulated for speculative gains at national expense.
Pakistan’s rising food import bill is not simply a trade imbalance. It is a warning that weaknesses in governance, planning, and economic management are now directly undermining the country’s fiscal resilience and food security.
The nation is not confronting a temporary market distortion. It is confronting a crisis of economic credibility.
Copyright Business Recorder, 2026
The writer is a former President OICCI; Global Business Leader and Strategic Affairs Analyst