IMF Requires Pakistan to Phase Out Price Controls on Wheat, Sugarcane, and Cotton

Pakistan-IMF Requires Pakistan to Phase Out Price Controls on Wheat, Sugarcane, and Cotton. The International Monetary Fund (IMF) has imposed a major condition on Pakistan’s federal and provincial governments as part of its $7 billion bailout package. This condition bars the governments from setting support prices for key agricultural products, including wheat, sugarcane, and cotton.

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This measure is part of a broader set of requirements aimed at reducing government spending and limiting the ability to offer subsidies. The IMF mandate requires all five governments—federal and provincial—to gradually eliminate price-setting practices, starting with the current Kharif crop season and continuing until June 2026. This will affect the pricing of crucial commodities like wheat, sugarcane, and cotton, as well as imported fertilizers, which will no longer benefit from subsidized rates.

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In response, the Punjab government has halted its wheat purchases from farmers, leading to a 40% drop in wheat and wheat flour prices and contributing to a low single-digit inflation rate last month. Additionally, the IMF has stipulated that no province can provide subsidies for electricity and gas throughout the 37-month loan program.

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