The ripple effects of Pak-Afghan trade collapse are far-reaching

Pakistan needs to secure its borders without stopping essential trade: security and economic continuity must work together.

The Pak–Afghan trade corridor has long served as a critical channel for the exchange of perishable commodities, linking producers, traders, and consumers across both economies. In recent years, however, recurring border closures driven by security concerns and geopolitical tensions have increasingly disrupted this flow, particularly affecting time-sensitive goods such as fruits and vegetables.

In the recent publication of PIDE policy viewpoint “Border Closures, Conflict, and the Trade of Perishable Goods. Policy Challenges for Pakistan–Afghanistan Relations”, it has been argued that closures since October 2025 have disrupted the value chain of perishable commodities, which have caused massive economic losses and spiked inflation. Moreover, these trade disruptions are a threat to national food security and weaken Pakistan’s regional trade position.

Pakistan’s exports dropped by 56 percent at the beginning of 2026, resulting in a monthly loss of approximately USD 177 million since the closure. Overall, economic losses have exceeded USD 4.5 billion. In February 2026, the Pakistan-Afghanistan Joint Chamber of Commerce and Industry (PAJCC) reported an estimated monthly loss of Rs. 50 billion (about USD 6 million a day) because 10,000 to 12,000 containers were stuck at the main borders. A similar crisis was highlighted by the CAREC Corridor Performance Measurement and Monitoring (CPMM) framework.

The policy viewpoint—utilizing data from the Quarterly Review of Foreign Trade published by the Pakistan Bureau of Statistics (PBS)—highlights that food group exports fell from USD 1,488.7 million in 2024 to USD 834.2 million in 2025, underlining the vulnerability of perishable trade to logistical disruptions. Perishable foods, such as fruits, vegetables, and food preparations, dropped from USD 150.6 million to USD 126.6 million during the same period. Rice exports also declined sharply from USD 1,153.3 million in 2024 to USD 521.3 million in 2025. This analysis confirms that border closures unevenly affect the exports of different food groups, causing a disproportionately high frequency of losses for highly perishable commodities.

During the closure, the wastage and degradation of food products worsened because items were left stranded at the border due to a lack of cold chain services. In October 2025, approximately 5,000 trucks remained stranded for weeks at the border. Last year, grapes from Afghanistan worth USD 50 million spoiled at the border; as a result, Pakistan faced losses of around USD 2 million a day.

The situation at the border has led to severe price volatility. For some fruits and vegetables, prices plummeted within Pakistan because they could not reach their destination markets in Afghanistan, resulting in heavy losses for growers and serious economic damage. Conversely, the scarcity of other food items led to a massive surge in prices.

The problem does not stop here if the farmers start growing less food crops then it will cause food security issues which may lead to price hike and the urge to import more food, raising the import bill. Ultimately, the solution lies in de-linking essential trade from political conflict through dedicated border corridors, or aggressively pursuing alternate regional markets for perishable exports.

There are implications beyond trade losses as well; these persistent closures pose severe national security risks by triggering urban instability and expanding illicit networks. Skyrocketing food prices, combined with border blockades, might force traders toward smuggling, under-invoicing, and potential militant financing. Furthermore, communities in KPK and Balochistan suffer from severe income losses. From a strategic standpoint, prolonged border friction threatens Pakistan’s long-term position as a regional transit hub. Afghan traders are already shifting to alternative trade corridors like Iran and Central Asia, which is eroding Pakistan’s economic leverage in the region.

The policy viewpoint clearly mentions that border closures affect the entire agricultural value chain. Because of underdeveloped cold-chain infrastructure, farmers were forced into distress sales or had to dump their harvest. Small traders exited the market alongside transporters who suffered millions in daily losses, leading to the abandonment of high-value perishables in favour of less profitable, storable crops. Global conflict management exemplifies that trade should be de-linked from the political skirmishes. The examples of managed trade relations can be seen in the case of India and China or Russia and Ukraine. Institutionalizing the conflict resolution mechanism is essential for domestic market stability as well as for regional connectivity. Without the strategic economic diplomacy, Pakistan may have lost competitiveness in the Central Asian region.

Also, Pakistan must establish protected “green channels” at the key Pak-Afghan borders for perishable commodities in order to ensure the clearance process even at the time of high security risks. Pakistan needs to establish alternative trade routes for the sake of building the resilient supply chains. Market diversification will not only reduce the over-reliance on single border crossings but it will also open new export avenues for perishable outputs and insulating domestic farmers from abrupt supply shocks.

Copyright Business Recorder, 2026