Pakistan’s Ministry of Finance has reported in its monthly economic outlook that the country’s wheat production is expected to decline by 11% to 27.9 million metric tons this year. Last year, Pakistan achieved a record wheat harvest of 31.4 million metric tons, but this year’s output is projected to be 3.5 million metric tons lower, raising concerns about domestic supply shortages and potential increases in flour prices. The report highlights that favorable weather conditions were key to achieving last year’s production targets, but prolonged dry conditions this year could put water stress on Rabi crops, particularly wheat in rain-fed areas, as noted by the Pakistan Meteorological Department.
With production falling short of demand, Pakistan may need to import wheat to bridge the gap. In October 2024, the Ministry of Food had warned the government that delays in setting wheat support prices and making procurement arrangements could discourage farmers from planting enough crops, potentially leading to wheat imports exceeding $1 billion. Despite these warnings, both federal and provincial governments refrained from announcing a wheat support price and instead opted to implement an International Monetary Fund (IMF) condition a year ahead of schedule. The Ministry of National Food Security had recommended that the Prime Minister set a profitable support price and procurement target for the 2024-25 Rabi sowing season, while committing to full deregulation by 2025-26, as required under the IMF program. However, the government did not accept the proposal. In 2023, the federal government had fixed the wheat support price at Rs3,900 per 40 kg, providing farmers with an 18% profit margin based on an estimated cost of Rs3,304 per 40 kg. The Ministry of Food emphasized the need for a clear policy on wheat pricing and procurement and urged the federal government to coordinate with provinces to ensure market stability. However, with no formal policy in place and deregulation imminent, Pakistan faces uncertainty in wheat supply and pricing in the coming months.
