Global Rice News

Export of Raw Food Products Surges by 60% in October, Leading to Higher Prices

The export of raw food products from Pakistan saw a significant increase of nearly 60% in the month of October. However, this surge in exports has resulted in higher prices for domestic consumers. In fact, food inflation rose to a staggering 29% in October, affecting the accessibility of essential commodities such as wheat flour, rice, sugar, meat, and vegetables.

Data released by the Pakistan Bureau of Statistics (PBS) reveals that food exports grew by 30.29% in the first four months of the fiscal year 2023-24, reaching $1.944 billion compared to $1.492 billion in the corresponding period of the previous year.

Reasons Behind the Surge in Food Exports

There are several factors contributing to the substantial increase in food exports. Firstly, the depreciation of the Pakistani rupee has played a significant role. Additionally, disruptions in the global supply chain and higher international prices have created a soaring demand for food products.

Among the food exports, rice has witnessed remarkable growth, accounting for a 30.12% increase in the July-October period of FY24. Basmati rice, which has been experiencing a decline, also saw a notable surge of 23.13%, reaching $225.56 million during this period. This rise in basmati rice exports can be attributed to India’s decision to ban rice exports.

Non-basmati rice exports also demonstrated growth, increasing by 33.64% to $485.22 million in July-October 2023-24 compared to $363.07 million in the same period last year.

Meat Exports on the Rise

Pakistan’s meat export industry has also experienced growth, with a rise of 18.77% in exports. The country exported meat worth $152.58 million in the first four months of FY24, compared to $128.46 million in the previous year. The introduction of new markets, including Jordan, Egypt, and Uzbekistan, has contributed to the increase in meat exports.

In addition, new enterprises are registering to export meat to the United Arab Emirates, Saudi Arabia, and other Gulf nations. Malaysia has also granted clearance to three additional slaughterhouses for exporting and processing meat. Furthermore, one meat exporting company has been given market access for heat-treated meat shipments to China.

However, the surge in meat exports has caused domestic meat prices to skyrocket over the past few years. Both buffalo meat and chicken prices have seen unprecedented increases, negatively impacting consumers.

Other Food Exports and Sugar Situation

Aside from rice and meat, the export of fruits increased by 13.53% in the first four months of FY24, amounting to $108.99 million. All other food product exports also exhibited growth, reaching $404.52 million, an increase of 13.88% compared to the corresponding period last year.

In the sugar sector, exports from February to August reached 248,854 tonnes, whereas no exports were recorded during the same period the previous year. However, an export ban was imposed by the Economic Coordination Committee on August 10, in response to the retail price of sugar reaching an unprecedented high of Rs200 per kilogram.

The sugar industry had been seeking approval for exports since March 2022 when domestic prices were between Rs80-85 per kg. However, the industry’s request was only granted in February 2023 by the PMLN-led coalition government, under pressure from coalition partners like the Pakistan People’s Party (PPP).

Conclusion

The significant increase in the export of raw food products from Pakistan has led to higher prices for domestic consumers. Rice exports, particularly basmati rice, witnessed substantial growth due to India’s ban on rice exports. The meat export industry has also experienced an upward trend with the introduction of new markets. However, this surge in exports has resulted in inflated meat prices, impacting consumers. It is important for the government to strike a balance between promoting exports and ensuring affordable prices for local consumers.

Source: Dawn