PESHAWAR
Pakistan Tobacco Company (PTC) has reiterated its long-standing commitment to farmers, full compliance with laws and regulations and the economic and financial stability of Pakistan, as part of the company’s ongoing engagement with stakeholders.
Speaking at a media briefing here on Wednesday, Muhammad Hamza Amir Khan, Regulatory Engagement Manager PTC said Pakistan Tobacco Company is one of the oldest companies operating in Pakistan and its relationship with farmers is based on a system of trust and assurance of a better economic future.
Humza Amir Khan explains some challenges faced by the company due to increasing price of cigarettes, illegal production and surplus cultivation of tobacco crop, ensuing in reduction in purchase by company from farmers.
“The company buys every kilogram of the quantity it promises to buy, without exception. During the surplus season in recent years, under the instructions of the Pakistan Tobacco Board (PTB) and its long-standing relationship with farmers, PTC purchased much more tobacco than its declared demand,” he claimed.
As a result, the company has a large stock of tobacco for the coming years, which has reduced demand in the future.
PTC official also clarified that higher tobacco prices in Pakistan compared to the global market and the increasing market share of illegal companies have also affected demand.
As the country’s leading tobacco company, PTC has been consistently working with farmers through crop assistance programs and ensuring timely payment for all tobacco purchased.
The PTC official held out assurance that farmers’ interests are best protected only if they follow the instructions and announcements of the Pakistan Tobacco Board, as the board regulates crop volumes, cultivation decisions and industry coordination.
Highlighting market instability caused by illegal operators, PTC official said that a major reason for the current demand slowdown and price pressure is the presence of unregistered and unregulated elements operating illegally outside the tax net.
This not only affects the legal industry but also exposes farmers to financial uncertainty and market instability.
Tax evasion has serious consequences, harming both the national exchequer and the legal industry. Its impact is particularly significant for Khyber Pakhtunkhwa (KP). For every billion cigarettes sold legally, Khyber Pakhtunkhwa province earns about Rs. 560 million, which is about 2.5 percent of the province’s NFC share.
This does not include Tobacco Development Cess (TDC), provincial taxes, and economic activities generated by legal farming. Thus, every illegal cigarette sale directly harms the provincial budget of KP and the public interest, he added.
In the broader economic context, the PTC pointed to the growing challenge of export competitiveness, saying that Pakistan’s price-fixing regime makes Pakistani tobacco at least US$1 per kg more expensive than alternative products available in the global market.
He said due to increase in Excise duty, production of cigarette by PTC is reduced from 60 billion in 2203 to 30 billion in 2025, registering a fall of almost 50 percent.
Similarly according to Ministry of Commerce data, Pakistan’s tobacco exports in the first quarter of this year fell by 29.5 percent in value compared to the same period last year.
This is a worrying sign, especially at a time when increasing exports is considered essential for the country’s economy.
PTC also stressed that all its operations are fully documented, audited and in line with global best practices.
