Tobacco Companies Slash Demand, Take Profit from Surplus
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Tobacco Demand Plummets in Pakistan, Threatening Farmer Livelihoods
Table of Contents
Purchasing companies have significantly reduced their tobacco orders for the 2026 crop, marking the fourth consecutive year of decline and raising concerns about financial hardship for Pakistani tobacco farmers.
the Shrinking Demand: A Four-Year Trend
Tobacco purchasing companies in Pakistan are poised to reduce their demand for the 2026 crop by 13.183 million kg, continuing a worrying trend. This follows cuts of 23.873 million kg over the past four years, signaling a substantial shift in the market. The total demand for 2026 is projected to be 61.627 million kg, a significant drop from the 85.5 million kg demanded in 2023.
| Year | Total demand (kg) | Change from Previous Year (kg) |
|---|---|---|
| 2023 | 85.5m | – |
| 2024 | 77.322m | -8.178m |
| 2025 | 74.810m | -2.512m |
| 2026 (Projected) | 61.627m | -13.183m |
The breakdown of demand for different tobacco types reveals varying trends. While demand for Flue-Cured Virginia (FCV) – the dominant variety – is decreasing, there’s a slight increase in demand for White Patta and burley tobacco.
Impact on Farmers: A Vulnerable Position
The declining demand poses a severe threat to the financial stability of Pakistani tobacco farmers. Unlike large multinational corporations, farmers lack the resources for substantial storage. This forces them to sell their crops quickly, often at unfavorable prices dictated by market fluctuations. The inability to hold onto inventory exacerbates their vulnerability to price drops and reduced purchasing from companies.
Specifically, farmers growing Virginia and White Patta tobacco are particularly exposed, as these varieties represent the largest share of the overall demand. The pressure to sell quickly can lead to significant losses, especially for smaller farms.
Who’s Buying? The Role of Major Players
The majority of tobacco purchases are made by multinational companies, with Pakistan Tobacco Company (PTC) and Philip Morris (Pakistan) Ltd leading the way. Together,these two firms account for over 36 million kg of FCV tobacco demand in 2026. The remaining demand will be distributed among 78 national companies, including khyber Tobacco.
This concentration of purchasing power in the hands of a few large companies further emphasizes the farmers’ limited bargaining power. Changes in the purchasing strategies of these major players have a disproportionate impact on the entire industry.