Wheat prices in Pakistan have surged to a 19-week high, reaching Rs. 710/10kg, or Rs. 2,839/40kg, with some market sources quoting rates as high as Rs. 3,000-3,050/40kg.
The sharp price recovery, a bane for consumers, is a timely boost for farmers, especially ahead of the upcoming Rabi sowing season. According to analysts, the rebound in prices may incentivize wheat cultivation, reversing the declining trend seen earlier this year due to poor returns of the last crop cycle triggered by high input costs, weak support prices, and adverse climate conditions.
Pakistan’s agricultural sector faced a sharp slowdown in the last fiscal year, with growth plunging to just 0.6%, a significant drop from the 6.4% recorded in FY24. Key crop output fell by 13.5% year-on-year, with wheat production alone declining by 8.9%. According to the State Bank of Pakistan (SBP), wheat output fell around 11% in FY25, as farmers scaled back sowing amid poor profitability.
A presentation by Fauji Fertilizer Company (FFC) highlighted that farmers incurred a loss of Rs. 10,695/acre this season, compared to a profit of Rs. 13,572/acre in the previous one. A recent report by Topline Securities attributed farmer losses to the government’s decision to lift support prices under the ongoing program with the International Monetary Fund (IMF), as well as soaring costs of fertilizer, seeds, and electricity.
The wheat price hike follows an earlier spike in sugar prices, which have risen from Rs. 138–140/kg in January 2025 to Rs. 180/kg today. This is well above the official ex-mill price of Rs. 165/kg and has prompted outrage from consumers though is anticipated to improve future farmer incomes. “This recovery in crop prices is likely to revive rural confidence and support household incomes, which is critical for boosting domestic consumption and overall economic growth,” said Topline Securities.
Improved rural incomes could stabilize agriculture’s contribution to the GDP and reduce Pakistan’s reliance on food imports, enhancing food security. Additionally, a price recovery could benefit sectors tied to rural demand, including two-wheelers, hatchback and sedan passenger cars, construction materials, and clothing.
Atlas Honda, in a recent analyst briefing, noted that urban consumers primarily drove current motorcycle sales due to rural economic stress. If the price trends persist, analysts expect a pickup in rural demand, particularly for motorbikes, as farm incomes recover.
While wheat prices remain 43% below the previous high of Rs. 1,256/10kg, a price driven by smuggling and inflated support prices, the current increase offers a measure of relief for the country’s farmers. Adding to the optimism, urea prices, a key input cost, are expected to remain under control in the short term due to sufficient inventory.
Economists believe this uptick in rural purchasing power will complement the broader recovery of Pakistan’s economy, which has been hampered by weak agriculture performance over the last two years.