SWABI: Pakistan has lost $30 million in tobacco exports from July 2025 to March 2026, and in the remaining three months of the current financial year (FY26), the country is likely to face further difficulties as conditions in the international market have changed, sources in tobacco companies told Dawn on Saturday.

They said that in FY25 (July-March), Pakistan’s total tobacco exports to different countries stood at $144m, while in the current fiscal year the figure dropped to $114m, reflecting a decline of $30m.

The sources said exports were expected to rise further but the trend had reversed, which was not a good omen for growers, companies and the federal government. Given the prevailing uncertain situation in the international market, prospects for improvement were bleak, they added.

When asked about the reasons, the sources said that around 160m kilograms of tobacco was currently surplus in the international market, due to which export prospects from Pakistan — particularly to the Middle East, its main market — had weakened. The ongoing US-Israel war on Iran had also negatively impacted tobacco exports.

$30m loss reported in July-March 2025-26

The total announced requirement of companies for the current year stands at 61.627m kg, compared to 74.810m kg in 2025, indicating a reduction of 13.183m kg.

Regarding surplus tobacco, officials of multinational companies, speaking on condition of anonymity, said the surplus was expected to exceed 120m kg this year. However, companies, small cigarette manufacturers and the tobacco business community have declared they will not purchase the surplus crop, the sources said.

Leading growers believe the surplus could exceed 120m kg because companies have slashed purchase agreements with farmers, while non-agreement holders are not ready to abandon cultivation.

The sources said Pakistan Tobacco Company (PTC) has terminated agreements with 3,500 farmers, and several other companies have done the same. However, non-agreement holders have continued cultivation despite warnings issued by the Pakistan Tobacco Board and PTC.

Surplus tobacco

In 2025, total surplus tobacco stood at 140m kg. When companies completed their announced quota and stopped buying, protest demonstrations erupted in tobacco-growing districts of Khyber Pakhtunkhwa, forcing the government to devise a new strategy under which buyers were instructed to purchase crop from growers and a surplus quota was announced, the sources said.

They added that the PTC quota for surplus tobacco was 26m kg, but due to pressure it purchased 39m kg. Similarly, Philip Morris had a quota of 20m kg and it purchased about 29m kg. The remaining 72m kg of surplus crop was purchased by small cigarette manufacturers and tobacco traders at low rates from growers, the sources said.

Protest

Meanwhile, the tobacco business community and small cigarette manufacturers have continued their protest, holding several gatherings in Swabi district against what they termed the “victimisation policy” of the Federal Board of Revenue (FBR).

They demanded withdrawal of law enforcement personnel deputed at tobacco green leaf threshing units, an end to FBR raids and harassment of businessmen, withdrawal of “unjust taxes”, restoration of the previous year’s tobacco quota, and a conducive working environment to enable growers to produce quality crops.

Published in Dawn, May 17th, 2026