Pak: Wheat Prices Soar To All-Time High

Pakistan is staring at an unprecedented wheat crisis amid the ongoing political and economic instability as the harvest is expected to be over two metric tonnes less this year.

The wheat shortage has shot up the prices in a further blow to the country’s slumping economy. The wheat crisis is being attributed to incessant heatwaves in the country.
Pakistan is expected to reap only 26.9 million tonnes of wheat this season against a target of 28.9 metric tonnes. An unexpected, early heatwave in mid-March shrivelled wheat grains, while poor application of fertilizer (both DAP and urea), either due to unavailability or higher costs, as well as a severe shortage of water also depleted crops, Dawn reported.

The government has withdrawn the massive fuel and electricity subsidies that have haemorrhaged tens of billions from the treasury, as the nation struggles to finance its rapidly expanding current account deficit.

According to Dawn, it is estimated that the country needs around 30.8 metric tonnes to meet its requirements until the next harvest. With about a million tonnes of wheat available in carryover stock, the gap between the total requirement and expected supply (26.9m tonnes) reduces to about 3.0m tonnes. That number is bound to be a headache for the foreign exchange-starved government.

Pakistan, however, prefers to import its wheat from Ukraine, the fifth-largest wheat supplier in the world with 19m tonnes of exports in 2021-22, However, exports from Ukraine have been hampered since the blockading of the Black Sea region by Russia.

The Black Sea region is responsible for exporting about 60 million tonnes of wheat.

These factors, coupled with higher fertiliser costs and weather worries, are compounding disruptions in the global supply chain and bringing grain prices further under pressure.

Khaleeque Arshad, a member of the Pakistan Flour Mills Association, said the private sector will not be importing wheat this year because of the extraordinary cost of the commodity in international markets. He urged the government to make import arrangements before wheat prices rise further

The private sector (the flour milling industry) has already made it clear it is not ready to share the government’s import burden and is instead looking to federal authorities to import the wheat and ensure it is supplied onward to the industry at subsidised rates.

Apart from the acute economic crisis, Pakistan is also grappling with climate change in the country which has led to an acute wheat shortage accompanied by food and water scarcity. (ANI)