Wheat harvesting in Pakistan. Photo: CSIRO

IN A startling blow to Pakistan’s food security ambitions, the country may be forced to ramp up wheat imports in the 2025-26 marketing year as domestic production plunges due to a sharp decline in the planted area and unseasonably dry weather conditions since the crop was planted late last year.

The winter crop planting program proceeded in the autumn of 2024 under a cloud of uncertainty around the government’s wheat procurement intentions in 2025.

For the first time in decades, the government failed to disclose, ahead of planting, if it would purchase domestically produced wheat in 2025 and a specific support price.

The support price has historically been announced prior to the start of the seeding program to provide farmers with an incentive to grow wheat by way of a floor price for their grain when harvest commences in the spring.

According to the United States Department of Agriculture’s Foreign Agricultural Service, “The sudden change in policy occurred without any prior announcement nor consultation with farmers. Government procurement has always been a major part of wheat marketing in Pakistan. The lack of clarity regarding a guaranteed price for the 2025-26 crop has created uncertainty among farmers regarding how they will market their crop.”

While authorities in Islamabad did encourage farmers to plant wheat by ensuring the availability of crop inputs and providing interest-free loans, the decline in domestic prices and the government’s decision not to buy wheat at a guaranteed support price prompted some farmers to shift to alternate crops, such as canola, pulses, and vegetables.

The change in policy ultimately led to a 6.8 percent decrease in the planted area from 9.73 million hectares in the 2023 campaign to 9.08 million hectares last autumn.

Add an extremely adverse growing season, and Pakistan’s 2025-26 wheat output is now forecast to fall from a record 31.6 million metric tonne last harvest to 27.5MMT this year.

However, further downward revisions are quite possible, with early harvest yields disappointing.

Weather unfavourable for wheat

Rainfall has been below average, and temperatures significantly above average throughout the entire growing season.

Even though the wheat crop in Pakistan is largely irrigated, usually two to three widespread rainfall events occur during the growing season, supplementing the supply of irrigation water and positively impacting final yields.

However, this precipitation pattern has largely been absent this season.

While the impact of the arid weather is more pronounced in rainfed production areas, which account for about 15 percent of the total wheat area, it has also exacerbated the country’s deepening irrigation water crisis.

With rising temperatures, shrinking glaciers and increasingly erratic rainfall, water supply has become less reliable than ever.

Hotter days mean higher evaporation, driving up demand for drinking water and crop irrigation, which consumes over 90 percent of the country’s available water.

At the same time, the expansion of cultivated land for food production, increasing cropping intensity, and a rapidly growing population are placing an even greater burden on Pakistan’s already-stretched water resources.

Water availability concerns

Two of the country’s main reservoirs, Tarbela and Mangla, are running dangerously low, raising concerns about whether they can sustain irrigation through the final stretch of the wheat-growing season. Both are at or below dead levels, meaning the water level has fallen below the natural release point.

This is especially alarming for Punjab and Sindh, Pakistan’s key wheat-producing regions, where a shortfall in water is likely to have devastating consequences on final crop yields.

Since the completion of the irrigation system in the 1970s, water demand has increased significantly, while storage capacity has reportedly decreased by about one-third due to siltation.

Additionally, no new large water reservoirs have been built in decades, and provincial disputes over irrigation water between Punjab and Sindh continue to hinder any progress.

Demand to remain strong

Domestic wheat consumption is expected to increase by around 2.2 percent to 31.9MMT in 2025-26, primarily driven by the exploding population as it is the country’s food staple.

Food, seed and industrial consumption accounts for 92.5 percent of domestic demand, with the balance used in the stockfeed sector, almost exclusively in poultry rations.

According to the FAS, wheat contributes around 72 percent of the population’s daily caloric intake, and per capita consumption is around 124kg per year, one of the highest in the world.

Around 1000 privately held flour mills meet about 40 percent of the flour demand, with the balance met by at-home processing.

The lower production and higher demand outlooks mean that Pakistan will likely need to import at least 1.7MMT in its May to April marketing year, up from virtually nothing in 2024-25.

The final production will ultimately determine import requirements, but at 2MMT, the extremely tight carry-out projection screams even higher import demand.

There are now fears that a lack of strategic reserves could lead to higher flour prices, especially in urban areas, potentially harming the government’s image.

To address the situation, Islamabad is turning to the private sector, particularly the flour milling industry, to maintain strategic wheat reserves.

Meetings have reportedly been held with mill owners, though it remains unclear what incentives the government will offer to encourage private investment.

Despite the growing production concerns, the government is currently maintaining its ban on wheat imports and exports, which came into force in July last year.

The trade restrictions were introduced to regulate the market after increased imports in the prior season led to a domestic surplus and depressed farmer returns.

With prices falling sharply as this year’s harvest gained momentum, any decision to import will most likely be made once the harvest pressure has dissipated, and domestic prices begin to rally.