Author name: Web Desk

Pakistan Mercantile Exchange (PMEX), the country’s only regulated commodity futures exchange, recorded a sharp rise in trading activity during FY2025-26, with annual turnover surging to Rs9.77 trillion despite limited public awareness of the platform and a broker network that has remained largely unchanged over the years. The exchange reported average daily trading volume of Rs32 billion and monthly turnover of Rs977 billion during the fiscal year. Activity peaked at a record Rs177 billion in a single day on October 17, 2025, while monthly volume reached an all-time high of Rs1.8 trillion in October. The growth highlights increasing investor interest in alternative asset classes and commodity-linked products at a time when Pakistan’s financial markets are gradually broadening beyond traditional investments such as stocks, bank deposits and real estate. PMEX Chief Executive Officer Khurram Zafar in an interview said the exchange’s performance demonstrates growing demand for regulated investment avenues, although awareness about commodity trading remains considerably lower than its actual market size. “Many people still do not know that Pakistan has a regulated commodity exchange that opens foot 22 hours and records tens of billions of rupees in daily transactions,” he said while speaking to The Boardroom Pakistan. According to PMEX data, total accounts opened on the platform have reached 67,585. Gold remained the most actively traded product during the fiscal year, followed by currencies traded through Contracts of Trade (COTs), silver, indices and platinum. The dominance of gold reflects investors’ preference for safe-haven assets during periods of economic uncertainty and exchange rate volatility. Currency contracts also attracted significant participation as businesses and investors sought tools to manage foreign exchange risks. Despite the impressive growth in trading volumes, PMEX continues to operate through a relatively small network of approximately 60 to 70 active brokers, a number that industry participants say has remained broadly stagnant for years. The contrast between rising trading activity and a limited broker base has raised questions about the untapped potential of Pakistan’s commodity market. Market experts believe that greater investor education and wider participation could significantly expand the size of the exchange. Unlike many international online trading platforms, PMEX follows a broker-mediated model in which investors access the market through licensed intermediaries, noted the CEO. While this structure strengthens regulatory oversight and investor protection, it also limits direct engagement between the exchange and retail investors. Meanwhile, foreign online trading applications have rapidly gained popularity among young Pakistanis through aggressive digital marketing campaigns. The trend has become increasingly visible as smartphone penetration and broadband connectivity expand across the country. Thousands of young investors have opened accounts on offshore trading platforms that offer direct access to foreign exchange, commodities and other instruments. According to Zafar, the popularity of such platforms is driven not only by technology and marketing but also by their ability to directly engage potential investors. He noted that regulated institutions face significantly higher compliance obligations imposed by the Securities and Exchange Commission of Pakistan (SECP), the State Bank of Pakistan (SBP) and other regulatory authorities. These compliance requirements increase operational costs but provide safeguards designed to protect investors and ensure market integrity. Unregulated platforms, on the other hand, often operate outside Pakistan’s regulatory framework while competing for the same pool of investors. Industry observers argue that the rapid growth of these platforms demonstrates strong appetite for investment products among Pakistan’s youth and middle-income households. Rather than viewing the trend as a threat, they suggest policymakers should focus on expanding the regulated investment ecosystem to accommodate growing demand. The government has already initiated efforts to bring some international digital trading and virtual asset platforms such as Binance under regulatory oversight, reflecting a broader shift towards formalising emerging financial markets. For PMEX, however, the significance of growing trading volumes extends beyond investment activity. Zafar believes commodity exchanges can play a wider role in improving market efficiency across the economy. A well-functioning commodity exchange helps establish transparent prices, reduce information gaps and improve confidence among market participants. Such mechanisms are particularly important in developing economies where commodity markets are often fragmented and characterised by inconsistent pricing. The exchange is also promoting the development of certified warehousing and electronic warehouse receipt systems that could eventually support agricultural commodities such as wheat, rice and other crops. Such systems would allow farmers to store produce in accredited facilities and obtain financing against warehouse receipts rather than selling immediately after harvest at depressed prices. Supporters argue that this approach can strengthen supply chains, reduce post-harvest losses and improve returns for producers while ensuring more stable supplies for processors and consumers. Globally, major commodity exchanges play a critical role in connecting producers, consumers, traders, financiers and investors within organised marketplaces. Analysts say Pakistan’s commodity sector remains at an early stage compared to international markets, but the rapid growth in PMEX trading volumes indicates increasing acceptance of commodity-linked investment products. With turnover approaching Rs10 trillion, record trading activity and a growing investor base, PMEX is gradually emerging as an important component of Pakistan’s financial infrastructure. The challenge now is converting that momentum into broader public participation and deeper integration with the real economy. For a platform that remains unfamiliar to many Pakistanis despite handling billions of rupees in daily transactions, the latest growth figures suggest that commodity trading is moving steadily from the margins towards the mainstream of the country’s investment landscape

KARACHI: Chairman Businessmen Group (BMG) Zubair Motiwala and President Karachi Chamber of Commerce & Industry (KCCI) Rehan Hanif have called upon the federal government to avoid repeating policy mistakes that have damaged economic activity, weakened exports, discouraged investment, and undermined industrial competitiveness, urging policymakers to seriously consider the business community’s recommendations while finalizing the Federal Budget 2026-27. In a joint statement, KCCI leadership stated that the disappointing outcomes of several fiscal measures introduced over the past two years should serve as a cautionary lesson for policymakers. They emphasized that many of these measures had been strongly opposed by KCCI well before their implementation, with detailed warnings supported by facts and economic analysis. Unfortunately, those concerns were ignored, resulting in consequences that have adversely affected businesses, exports, investment, employment, and government revenues. Commenting on the shift of exporters from the Final Tax Regime (FTR) to the Normal Tax Regime (NTR) under the Finance Act 2024, Zubair Motiwala stated that KCCI had categorically warned that increasing the tax burden on exporters would prove counterproductive. “The government adopted a short-term revenue approach without considering its long-term impact on exports and economic growth. The results are now evident. Pakistan’s exporter base has shrunk, export competitiveness has suffered, and tax collection from exporters has failed to achieve the desired outcome. At a time when global supply chain disruptions and geopolitical developments presented a unique opportunity for Pakistan to capture additional export markets, the country failed to capitalize on those opportunities.” He reiterated KCCI’s demand for the immediate restoration of the Final Tax Regime at a 1 percent rate for all exporters, stressing that export growth remains the most sustainable path towards improving foreign exchange reserves and economic stability. President KCCI Rehan Hanif expressed serious concern over the removal of the Export Facilitation Scheme (EFS) benefits on yarn and fabric. He stated that the scheme had played a critical role in enhancing the competitiveness of Pakistan’s export-oriented industries. “KCCI had never supported misuse of the scheme, but instead of abolishing the facility, we had proposed stricter monitoring and reforms to ensure transparency and fairness. Unfortunately, the decision has negatively impacted exporters’ liquidity while failing to achieve the intended objectives.” KCCI leadership also strongly criticized the continuation of Super Tax under Section 4C, describing it as a punitive levy that discourages growth, investment and entrepreneurship. “Taxing success is neither a sustainable nor growth-oriented policy. Businesses that expand, invest and create employment should be encouraged rather than penalized. While such taxes may generate short-term revenues, they significantly damage investor confidence, discourage foreign direct investment and force businesses to postpone or abandon expansion plans”, said Zubair Motiwala. Highlighting the severe challenges facing industry due to energy costs, Rehan Hanif noted that KCCI has consistently advocated for regionally competitive utility pricing. He said that the withdrawal of Regionally Competitive Energy Tariff (RCET) had severely undermined Pakistan’s export competitiveness, making industrial electricity among the most expensive in the region. “Countries such as India, Bangladesh and Vietnam continue to attract export orders due to their competitive energy pricing structures while Pakistani exporters struggle with unsustainable production costs. The restoration of RCET is essential to revive industrial growth, generate employment, increase exports and strengthen the national economy,” he remarked. Referring to gas pricing and supply policies, Zubair Motiwala observed that successive governments have failed to address structural flaws within the energy sector while burdening productive industries with the costs of inefficiencies, leakages, theft and cross-subsidies. “Industrial consumers, who maintain one of the highest bill recovery rates in the country, are unfairly carrying the financial burden of systemic inefficiencies. Despite repeated tariff increases and policy interventions, circular debt continues to rise. This demonstrates that existing policies are failing to address the root causes of the problem,” he said. To resolve these longstanding issues, Chairman BMG proposed the segregation of SSGC operations into separate entities for industrial and non-industrial consumers, enabling transparent accounting, improved efficiency and better identification of sources contributing to circular debt. Motiwala also raised concerns regarding a number of regulatory and taxation measures that continue to create unnecessary hardships for businesses. These include annual biometric verification requirements under SRO 350, unresolved technical flaws in the digital invoicing framework requires further refinement and testing before full-scale implementation. We strongly recommend extending the integration deadline until December 2026 to allow businesses and authorities sufficient time to address existing shortcomings,” he added. KCCI leadership, however, appreciated Prime Minister Shehbaz Sharif for his positive engagement with the business community during his recent meeting with KCCI on June 1, 2026. They welcomed several important commitments made by the Prime Minister, including the establishment of a PRAL office in Karachi, expeditious processing of pending sales tax refunds, regular presence of senior FBR officials in Karachi, and amendments to the Electric Vehicle Policy aimed at promoting local manufacturing and reducing dependence on imports. “These measures reflect a positive response to genuine concerns raised by the business community and demonstrate the Prime Minister’s willingness to engage constructively with stakeholders”, said Motiwala. In their concluding remarks, Chairman BMG Zubair Motiwala and President KCCI Rehan Hanif urged the government to carefully review the recommendations submitted by KCCI and other trade bodies before finalizing the Federal Budget 2026-27. “The business community is not merely highlighting problems; it is offering practical, evidence-based solutions to strengthen Pakistan’s economy. Policymakers must recognize that economic growth, export expansion, industrialization and revenue generation are interlinked objectives that can only be achieved through consultation and partnership with the private sector. The government must reverse policies that have demonstrably failed and adopt measures that promote investment, competitiveness, exports and sustainable economic growth. Pakistan’s economic future depends on a strong partnership between the government and the business community because Pakistan and its entrepreneurs cannot succeed in isolation”, they concluded.