Food Sector Debt Surges Past Rs. 325 Billion

Pakistan’s food sector is caught in a deepening financial crisis, with circular debt ballooning to Rs. 325.6 billion, mostly driven by accumulated markup rather than original dues, according to documents from the Trading Corporation of Pakistan (TCP). As of September 30, 2025, Rs. 237.3 billion, nearly three-fourths of the total, comprises interest payments, while the remaining Rs. 88.3 billion is principal debt. The figures reflect years of delayed recoveries and financial mismanagement within the country’s food supply chain. The National Fertilizer Marketing Ltd. (NFML) is the largest defaulter, owing Rs. 126.8 billion, followed by the Utility Stores Corporation (USC) with Rs. 110 billion. Both entities operate under federal control, highlighting what officials describe as “persistent financial indiscipline” in state-run enterprises. Among provincial governments, Punjab owes Rs. 17.6 billion, followed by Khyber Pakhtunkhwa at Rs. 13.2 billion, Sindh at Rs. 9.6 billion, and Balochistan at Rs. 9.5 billion. Gilgit-Baltistan and Azad Jammu and Kashmir together owe nearly Rs. 9 billion. Other major debtors include the Pakistan Navy (Rs. 231 million), Directorate General Procurement Army (Rs. 1.7 billion), PASSCO (Rs. 6.1 billion), and the Ministries of Food Security and Industries, which collectively owe over Rs. 21 billion. The TCP report indicates that instead of declining, the debt has grown steadily due to non-payments, weak financial controls, and compounding markup, now accounting for more than 73 percent of total liabilities. Officials warn that the mounting food sector debt reflects the same circular debt pattern seen in Pakistan’s power and gas sectors, posing a serious fiscal risk. Without strict accountability and timely payments, the sector could soon face a liquidity crunch, threatening food security and market stability nationwide.