Pakistan's non-textile exports suffered a sharp 13.77% decline in fiscal year 2026, dropping to $12.21 billion from $14.16 billion the previous year. The downturn was driven by a steep fall in agricultural shipments and mixed performance across industrial sectors, according to data from the Pakistan Bureau of Statistics. Main Developments Agricultural exports bore the heaviest losses, tumbling 29.49% to $5.02 billion from $7.12 billion in FY25. Both the value and volume of farm commodities fell, reflecting softer international prices and weaker demand in key markets. Non-agricultural exports, by contrast, managed a modest 3.15% increase, rising to $7.19 billion. Engineering goods led this segment with a 5.64% gain, driven by stronger shipments of industrial machinery, transport equipment, electric fans, auto parts, and rubber tyres. Cement export value rose 4.02% year-on-year, though volumes dipped 4.07%. Read also: Tax Ombudsman Orders FBR to Fix Software Denying Legal Credit Background The agricultural sector has long been a cornerstone of Pakistan's export economy, but FY26 marks a significant setback. The simultaneous drop in both price and volume signals structural challenges, including reliance on a narrow range of commodities and vulnerability to global price swings. In contrast, industrial segments like engineering and cement have shown resilience, though their gains were insufficient to offset the agricultural slump. Leather and footwear exports presented a mixed picture: overall footwear dipped 0.47%, with a 33.02% increase in "other footwear" categories offsetting declines in leather footwear (down 5.22%) and canvas footwear (down 33.02%). Why It Matters The export slump puts additional pressure on Pakistan's foreign exchange reserves and current account balance. Agriculture alone accounts for a significant share of non-textile shipments, and its 29% decline could widen the trade deficit. For industries like leather, the marginal 0.64% growth masks weakness in raw leather exports (down 6.35%) and leather gloves (down 5.15%), though leather garments rose 7.92%. Surgical instruments, a traditional export strength, recorded negligible growth of negative 0.03%, as global brands continue to dominate Western markets. What's Next Policy makers face the challenge of diversifying export markets and boosting value-added products to mitigate volatility. The closure of the Torkham border has already impacted gur exports, which fell 2.68% in FY26. Meanwhile, sports goods exports surged 10.08%, driven by an 11.72% increase in football shipments, offering a potential model for other sectors. Further data releases will reveal whether the agricultural decline is cyclical or structural, and whether industrial gains can be sustained. Upcoming trade negotiations and border reopening could influence near-term recovery.