Food Sector Circular Debt Soars to Rs325.6B

ISLAMABAD: Pakistan’s food sector reels under a crushing financial crisis, with circular debt ballooning to Rs325.6 billion, per The News, citing Trading Corporation of Pakistan (TCP) data.

As of September 30, 2025, federal and provincial agencies owe TCP Rs88.28 billion in principal, dwarfed by a colossal Rs237.32 billion in accumulated markup—73% of the total debt stemming from interest, exposing catastrophic dues recovery failures and sector mismanagement.

The National Fertilizer Marketing Ltd. (NFML) tops the defaulters at Rs126.78 billion, trailed by the Utility Stores Corporation (USC) at Rs110 billion. Both federal entities are linchpins in food supply, spotlighting rampant financial mismanagement in state-owned enterprises.

Punjab leads provinces with Rs17.59 billion in arrears, followed by Khyber Pakhtunkhwa (Rs13.24 billion), Sindh (Rs9.59 billion), and Balochistan (Rs9.50 billion). Gilgit-Baltistan and Azad Jammu & Kashmir owe Rs6.72 billion and Rs2.26 billion, respectively.

Other major debtors include the Pakistan Navy, Directorate General Procurement Army, PASSCO, the Ministry of National Food Security and Research, and the Ministry of Industries and Production, further strangling the food security framework.

This spiraling food sector circular debt echoes crises in power and gas. Experts warn that without draconian accountability and timely payments, a liquidity meltdown looms, jeopardizing food security and market stability.