Pakistan’s trade balance may weaken by around $1.93 billion as a result of the agricultural losses caused by the 2025 floods, according to brokerage house Arif Habib Limited (AHL).
The most notable pressure is expected from cotton, where domestic shortfalls could push imports up by 737k tons, costing about $1.06 billion.
This reflects the textile sector’s dependence on cotton and highlights the risks that supply disruptions pose for the country’s largest export-oriented industry. On the export side, the outlook also shows some strain.
The brokerage house expects textile exports to decline by roughly $300 million, while rice shipments may fall by 958k tons, translating into about $278 million in lower earnings. Sugar exports could contract by 708k tons, equivalent to around $283mn. Taken together, these reductions would bring total export losses to nearly $861 million.
The combined effect of higher cotton imports and weaker exports in textiles, rice, and sugar would therefore amount to a trade balance impact of around $1.93 billion in FY26.
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While this figure may not seem large compared to Pakistan’s overall trade deficit, the concentration of losses in key sectors is meaningful, the report noted.
Textiles, rice, and sugar have historically supported foreign exchange inflows, and pressures here add to the challenges already facing the external account.
