By Ayesha Saba

Pakistan’s imports of agricultural machinery and implements increased 25.9% in July 2026, while agricultural credit disbursement grew nearly 25% in FY2026, indicating increased financing and investment in farm mechanisation despite emerging climate risks and lower use of DAP fertiliser.

According to the Finance Division’s Monthly Economic Update & Outlook – August 2026, available with Wealth Pakistan, imports of agricultural machinery and implements reached $18.2 million in July, compared with $14.4 million in the corresponding month of the previous year.

Tractor sales also recorded an improvement, increasing 3.9% year-on-year to 1,242 units during July. Tractor production stood at 1,361 units during the month.

The machinery and tractor indicators came alongside a substantial increase in the flow of formal credit to the agriculture sector during the previous fiscal year.

Agricultural credit disbursement reached Rs3.232 trillion during July-June FY2026, up 24.7% from Rs2.592 trillion in the preceding fiscal year.

The higher credit flow provides farmers with greater access to financing for agricultural inputs and investment, while the rise in machinery imports indicates continued spending on mechanisation.

The government remains committed to supporting farmers through timely access to quality seeds, agricultural credit, fertilisers and modern machinery, according to the Finance Division.

Fertiliser consumption, however, presented a mixed picture during the ongoing Kharif season.

During Kharif 2026 from April to July, urea offtake reached 2.054 million tonnes, representing an increase of 10.5% compared with Kharif 2025.

In contrast, DAP offtake fell 29.9% to 292,000 tonnes during the same period. The Finance Division attributed the decline in DAP consumption to its high prices.

The contrasting fertiliser trends indicate that while farmers increased their use of urea, demand for the more expensive DAP remained under pressure.

Despite stronger machinery imports, higher agricultural credit and increased urea consumption, the report cautioned that climatic conditions could affect agricultural performance during the year.

The Finance Division identified heavy rainfall and floods as looming climatic threats, warning that they pose a risk to achieving the agriculture sector’s growth targets.

A 25.9% rise in machinery imports paired with 24.7% growth in agricultural credit signals greater access to equipment and financing for the farm sector. However, a sharp decline in DAP fertilizer usage and weather-related risks remain key challenges for agricultural performance in FY2027.

Credit: INP-WealthPk