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The future of food exports

By Mohiuddin Aazim 2025-07-08
he hike in petrol prices effective July 1, 2025, and possible future hikes during the new fiscal year, to generate the much-needed revenue will have widespread impact on the cost of doing business.

Fuel is a foundational input across nearly all sectors from transportation and logistics to agriculture and manufacturing. As petrol becomes more expensive, freight charges rise making it costlier to move raw materials, finished goods, and even workers. This adds inflationary pressure on domestic supply chains, eating into business margins and eventually being passed on to consumers.

For exporters, the challenge is particularly acute. Pakistani exports already struggle with high input costs, energy shortages, and bureaucratic inefficiencies. The rise in petrol prices inflate transport costs for goods headed to ports, increases inland freight charges, and indirectly affects electricity costs due to the reliance on petroleum-based generation in parts of the country. This raises the per-unit export cost at a time when international markets remain highly competitive and price-sensitive.

Consequently, Pakistani goods risk losing market share to regional competitors like Bangladesh, India, and Vietnam, who often offer lower logistics costs and more consistent policy environments. In the absence of meaningful compensatory measures such as targeted subsidies or export incentives, the July fuel price hike could further erode Pakistan`s export competitiveness. Add to it a hefty 50 percent increase in fixed charges of gas bills notified recently and you can imagine compounding challenges for exports including textiles and food, the two major export groups.

In an era of shifting trade dynamics, climate disruption, and rising food insecurity, Pakistan stands at a pivotal crossroads.

Although still struggling with inefficiencies and supply shocks, the country is now witnessing a quiet yet determined transformation: a bold bid to become a major food exporter in the global marketplace.

Pakistan`s agricultural base is robust in potential but hamstrung by legacy challenges. Despite being one of the world`s top producers of wheat, rice, mangoes, dates, and livestock, the country`s food export numbers remain modest relative to their capacity. In FY24, food exports stood at around $6.3 billion, with rice contributing the lion`s share. During 11MFY25 food exports fetched around $6.75bn, or 23pc of total export earnings, the latest data from the Pakistan Bureau of Statistics (PBS) reveal.

However, export growth has often been reactive triggered by grain surpluses or currency depreciation rather than the result of a focused, value-added strategy. The global food market is hungry for traceable, safe, and climateresilient food. Pakistan, with its fertile plains and vast livestock population, has a real opportunity to position itself as a supplier of premium, halal, organic, and value-added food products.

Demand for halal meat, dairy derivatives, dehydrated fruits, and certifiedorganic staples are growing across the Middle East, Africa, Southeast Asia, and even Europe. If Pakistan plays its cards right, food exports could cross $10bn within three to five years.

But here lies a paradox: the more Pakistan exports food, the more expensive food becomes for its own people. In recent years, aggressive export volumes especially of wheat, onions, rice, and meat have led to visible shortages in local markets, pushing prices upward.

When exporters chase foreign exchange and the government delays import decisions to protect reserves, it creates a vacuum in local supply chains.

This is what happened during the last onion crisis and wheat shortages; food inflation surged, hurting the poor disproportionately. Food inflation in urban Pakistan hovered around 28-32pc for several months in 2023-24, according to PBS.

The solution lies not in curbing exports but in managing them smartly. First, realtime food inventory monitoring must be institutionalised to avoid export gluts.

Second, strategic buffer stocks of essentials like wheat, sugar, and pulses should be maintained with clear release mechanisms when domestic prices spike.

Third, a tiered export policy can help where raw essentials face export quotas or seasonal restrictions, while high-value processed forms (like flour mixes or frozen meals) are prioritised. This way, Pakistan can earn more without compromising domestic supply.

Finally, regional zoning and contract farming models can be promoted wherespecific zones are dedicated to exportoriented crops, while other zones focus on domestic staples, ensuring neither market cannibalises the other. Exporting wheat or rice in raw form brings slim margins. But parboiled rice, branded packaged grains, spiced lentil mixes, frozen chapatis, and ready-to-cook meals offer several-fold value-gain. Private food companies are beginning to embrace this model.

Pakistan is home to one of the largest halal meat industries, yet it trails far behind countries like Brazil and Australia in halal-certified exports. Why? If hygiene standards and traceability are enforced, Pakistan can emerge as a trusted supplier of halal-certified products globally.

The integration of solar-powered cold chains, climate-smart irrigation, and farmto-port digital logistics can dramatically reduce post-harvest losses (currently up to 40pc in perishables). Agricultural startup companies like Tazah and ZariHub are already testing scalable models.

Geo-economics also matters. If political relations with neighbours stabilise, regional food trade could flourish offering shorter supply routes, lower freight costs, and cultural affinity with local food products.

The success stories of Vietnam (cashew), Turkey (hazelnuts), and Thailand (rice and seafood) stem from strong public-private export alliances.

Pakistan needs similar coordination, supported by export financing, quality labs, packaging innovation, and brand-building support for small and medium sized enterprises.m