SWABI: Tobacco purchasing companies have reduced their demand for the 2026 crop by 13.183 million kilograms — the fourth straight year of declining procurement — a move expected to hit growers with heavy financial losses, sources told Dawn on Saturday.
Industry experts say that while multinational and national firms have ample capacity to store large tobacco inventories, farmers do not. Limited financial resources and lack of storage facilities for key varieties, including Virginia and White Patta, force growers to sell surplus stock immediately, often at depressed market prices.
For 2026, the total buying requirement has been fixed at 61.627m kg: 58.184m kg of flue-cured Virginia (FCV), 0.360m kg of dark air-cured, 1.342m kg of White Patta, 1.381m kg of burley and 0.360m kg of sun-cured tobacco.
This marks a steep drop of 23.873m kg in four years, from 85.5m kg in 2023 to 77.322m kg in 2024, 74.810m kg in 2025, and now 61.627m kg for 2026.
Multinational companies remain the dominant buyers, led by Pakistan Tobacco Company (PTC) and Philip Morris (Pakistan) Ltd, which together will procure over 36m kg of FCV tobacco next year. The remaining demand is distributed among 78 national companies, including Khyber Tobacco.
Shift in procurement trends
According to the Pakistan Tobacco Board (PTB), demand for FCV, dark air-cured, and sun-cured varieties has declined, while White Patta and burley requirements have ticked upward. FCV, however, continues to be the core variety used in cigarette production and export.
Grower representative Iqbal Shewa said both multinational and national buyers remain focused on FCV for domestic manufacturing and overseas shipments. To minimise disputes, the PTB has instructed companies and landowners to sign formal purchasing agreements for the next season and share them with the board, urging farmers to grow only as per agreed quantities.
Price gaps widen grower losses
Former PTB director Ayaz Khan attributed the reduced demand partly to a price gap between the weighted average price (WAP) and the minimum indicative price (MIP). For the current season, the WAP stood at Rs719 per kg, while surplus tobacco was purchased at the MIP of Rs545 — a difference of Rs174.8 per kg.
Companies profited heavily from this discrepancy, buying 35.35m kg of surplus tobacco at lower rates, saving a combined Rs6.17 billion — gains not passed on to farmers.
Growers, on the other hand, faced serious financial setbacks as lower purchase prices eroded their annual earnings.
Exports rise but growers don’t benefit
Despite shrinking domestic procurement, Pakistan’s tobacco exports surged from 20m kg in 2023-24 to 47m kg in 2024-25 — a 135 per cent increase.
But this boom has not translated into relief for farmers. Companies continue to limit domestic purchases to avoid paying higher prices for surplus tobacco while capitalising on strong export demand.
Experts warn that unless procurement levels stabilise and pricing mechanisms are reformed, the burden will continue to fall disproportionately on growers, who already struggle with low prices and inadequate storage facilities.
