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Pakistan-Afghanistan trade falls 6% to $475 million in first quarter of FY2025-26

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Bilateral trade between Pakistan and Afghanistan declined by 6 percent during the first quarter of Pakistan’s 2025–26 fiscal year, totaling $475 million, compared to $502 million in the same period of 2024–25, according to official data.

Pakistan’s The Nation reported that on a year-on-year basis, trade between the two neighbors also dropped by 13 percent in September 2025, reaching $177 million, down from $204 million in September 2024.
Exports decline, imports rise

Pakistan’s exports to Afghanistan saw a notable decline of 15 percent, falling from $320 million to $271 million during the July–September period. Officials attributed the drop to reduced demand and supply chain challenges.

In contrast, Pakistan’s imports from Afghanistan increased by 12 percent, rising from $182 million to $203 million, suggesting stronger Afghan export activity and higher demand for Afghan goods in Pakistan.

As a result, Pakistan’s trade surplus with Afghanistan narrowed, driven primarily by the sharper fall in exports relative to overall trade volume.

Monthly and yearly trends

On a year-on-year (YoY) basis, Pakistan’s exports to Afghanistan dropped sharply by 36 percent, from $128 million to $81 million, while imports from Afghanistan grew 26 percent, from $76 million to $96 million.

Month-on-month, total trade grew 19 percent, from $149 million in August to $177 million in September 2025.

During that same period, Pakistan’s exports fell 8 percent, while imports surged 56 percent, reflecting a widening shift in trade dynamics.
Export performance by category

Despite the overall decline, several key Pakistani export categories saw strong growth during the first quarter of FY2025-26:

Prepared animal fodder and oil cakes: up 557%, from $0.7 million to $4.59 million
Fruits and vegetables (mainly mangoes): up 140%, from $9.22 million to $22.10 million
Animal or vegetable fats and oils: up 72%, from $6.14 million to $10.58 million
Cement: up 41%, from $20.65 million to $29.06 million
Wood and articles: up 29%, from $9.52 million to $12.32 million
Plastics and articles: up 42%, from $5.07 million to $7.19 million
Pharmaceutical products: up 10%, from $40.61 million to $44.68 million
Declining exports
Several traditional export commodities, however, experienced steep declines.
Sugar exports dropped 100%, from $69.75 million to zero
Malt extract: down 84%, from $7.51 million to $1.22 million
Tractors: down 61%, from $3.63 million to $1.41 million
Miscellaneous edible food preparations: down 53%, from $13.89 million to $6.47 million
Rice: down 21%, from $64.11 million to $50.55 million

Trade outlook

Economists note that while Afghan exports to Pakistan are rising, the drop in Pakistan’s exports could reflect supply disruptions, pricing pressures, or evolving trade routes following new customs and transit policies.

Bilateral trade between the two countries has historically fluctuated due to border closures, political tensions, and shifting regional logistics networks. However, both Islamabad and Kabul have expressed interest in stabilizing trade flows through new mechanisms under the Afghanistan–Pakistan Transit Trade Agreement (APTTA) and expanded regional connectivity initiatives.

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Bertrand assures Muttaqi of continuation of EU assistance to Afghanistan

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The Ministry of Foreign Affairs of the Islamic Emirate said in a statement on Wednesday that Gilles Bertrand, the newly appointed EU Special Envoy for Afghanistan, has assured the IEA of the continuation of EU assistance to the country.

Bertrand made these remarks during a meeting with Amir Khan Muttaqi, the Minister of Foreign Affairs.

Bertrand has praised the Islamic Emirate for their four-year achievements in areas of stability, security and economy, assuring continued EU assistance and calling for expanded cooperation to attract major foreign investment to the country.

The statement added that Bertrand praised the IEA as well for accommodating millions of returning Afghan migrants.

He also noted the EU’s increased attention and cooperation in the economic sector, particularly regarding Afghanistan’s private sector and called for further collaboration between the two sides to attract investment from major international companies.

During the meeting, Muttaqi expressed appreciation for the work of the EU’s previous envoy for Afghanistan within the framework of humanitarian cooperation.

Muttaqi also highlighted major projects launched by the Islamic Emirate of Afghanistan over the past four years and called on the European Union to take positive steps toward Afghanistan’s development in various areas.

In conclusion, both sides emphasized the continuation of cooperation and such meetings.

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Regional powers intensify mediation as Kabul–Islamabad tensions escalate

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Tensions between Kabul and Islamabad continue to rise, prompting renewed concern among regional stakeholders and pushing mediation efforts into a critical phase.

With relations worsening and no signs of a breakthrough, diplomatic actors are ramping up attempts to steer both sides toward dialogue and de-escalation.

Diplomatic sources say political engagement remains the only viable path to resolving the current standoff. Qatar, Türkiye, Iran, and China have all stepped in to facilitate communication, each seeking to create conditions that could pave the way for direct talks between the Islamic Emirate and Pakistan.

Iran is reportedly working to convene a dedicated regional meeting focused on jump-starting dialogue — an initiative that follows earlier mediation efforts by Qatar and Türkiye, both of which are currently on hold. China has also reiterated its support for negotiations, stating that Beijing stands ready to help ease tensions and strengthen bilateral ties.

Meanwhile, Saudi Arabia is expected to host a fresh round of talks between Kabul and Islamabad in the coming weeks. Riyadh previously facilitated discussions between delegations from both countries, though those meetings ended without tangible progress.

Analysts caution that regional diplomacy, however active, can only succeed if both Kabul and Islamabad demonstrate the political will to resolve their disputes. Effective mediation, they say, could restore stability to one of South and Central Asia’s most strained bilateral relationships — but the window for a peaceful settlement may be narrowing.

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Nearly 22 million Afghans will need aid next year as crises deepen

UNICEF underscores that sustained support is crucial to ensuring Afghan children “have the chance to survive and thrive” despite one of the world’s most complex and protracted crises.

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Afghanistan is heading into 2026 with worsening humanitarian needs as overlapping crises continue to erode essential services and protection systems, UNICEF warned in its Humanitarian Action for Children 2026 appeal.

According to the agency, 21.9 million people — including 11.6 million children — will require humanitarian assistance next year. This comes as the country remains trapped in a cycle of natural disasters, economic instability, shrinking protection space, and climate-driven shocks, all compounding the impact of more than 40 years of conflict.

UNICEF says the protection crisis is deepening, with women of reproductive age, children, youth, and marginalized groups facing heightened risks. Women and girls remain disproportionately affected due to bans on secondary education and restrictions on employment, which the agency describes as a “systemic rights crisis” with severe long-term consequences.

The report also highlights chronic underinvestment in water, sanitation and hygiene (WASH) systems, made worse by recurring drought, floods, and harsh winters. These compounding pressures are undermining community resilience and increasing dependency on humanitarian aid.

To meet urgent needs and reinforce community-level systems, UNICEF is appealing for $949.1 million. The funding aims to provide life-saving support to 12 million people, including 6.5 million children, through health services, education, nutrition treatment, and safe drinking water.

Key Targets for 2026

12 million people to access healthcare in priority provinces

5.7 million children to receive emergency education support

1.3 million children (6–59 months) with severe wasting or high-risk malnutrition to receive treatment

2.9 million people to gain access to safe drinking water through UNICEF-supported programmes

UNICEF underscores that sustained support is crucial to ensuring Afghan children “have the chance to survive and thrive” despite one of the world’s most complex and protracted crises.

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