Millat Tractors to Enter New Foreign Markets Like Mexico As Afghan Exports Decline

Millat Tractors Limited is shifting its export strategy toward new destinations, including Mexico, as sales to Afghanistan decline due to ongoing tensions between the two countries. According to Topline Securities, demand in Mexico and other new markets will help offset the expected drop in Afghan exports, which previously formed a significant share of its overseas sales. During its corporate briefing session, Millat Tractors said its overall performance remains stable despite a depressed domestic market. Management noted that government policies and the Green Tractor Scheme have slowed regular sales, as farmers wait for balloting and subsidy allocations. The government’s plan to extend the scheme into FY26 is further delaying normal demand. Deliveries under the scheme have begun and contributed to a 2,000-unit jump in October sales, but the company reported delays in government payments, which are now stretching delivery timelines. Even so, Millat Tractors has maintained its market share under the scheme. Management added that weak crop prices and farmers’ poor financial condition make a sustained month-on-month rise in sales unlikely. The tractor industry has just experienced its worst year in two decades, driven by weak farm economics, though the company expects the downturn to end. Millat Tractors also highlighted that it holds sales tax refund claims of Rs. 7.59 billion as of June 30, 2025, including Rs. 1.3 billion related to the last fiscal year. The company continues to lead in localization, with 92 percent of its components produced locally. Imported parts, such as fuel pumps and four-wheel drive kits, remain necessary due to technological limitations and high capital expenditure requirements in Pakistan. Management reiterated that the reentry of Belarus tractors will not negatively affect its market position.