Pakistan’s Economic Coordination Committee (ECC) has asked the Ministry of National Food Security and Research to prepare a plan for changing how tobacco crop prices are regulated. According to a report by The Express Tribune, the ministry has been given three months to propose a workable mechanism. The direction is a request for a policy proposal, not an announcement that price controls have already ended.
What did the ECC decide?
The committee considered proposals concerning minimum indicative prices for the 2026 tobacco crop and tobacco cess rates for 2026–27. The report says the ECC approved the ministry’s proposal to maintain the previous year’s notified prices and cess rates while asking for a longer-term approach to deregulation.
How are tobacco prices currently determined?
The Pakistan Tobacco Board operates under the Pakistan Tobacco Board Ordinance, 1968. The existing system considers production costs, inflation and a specified profit margin when calculating indicative prices for different tobacco grades. Growers, companies and provincial agriculture departments contribute production-cost assessments.
Why was the formula questioned?
Officials sought explanations for differences between proposed 2026 and 2025 prices and for variations among tobacco types. The report cites a calculated production cost of Rs473.61 per kilogram for plain flue-cured Virginia tobacco, with an indicative price of around Rs523 per kilogram using an earlier inflation measure. A different inflation assumption would produce a higher figure. These figures describe policy calculations, not necessarily the price paid in every transaction.
What could change for growers?
Any eventual reform would need to consider how growers negotiate prices, how market information is shared and whether protections remain for smaller producers. The FBR chairman reportedly also raised the issue of exportable surplus, given the difference between tobacco production and domestic consumption.
No final deregulation framework, implementation date or new market-price system was announced in the cited report. Those details would require a subsequent government decision.
Source: The Express Tribune, reporting on the ECC discussion of tobacco crop price regulation. This article summarises the reported policy process and does not endorse tobacco consumption.
