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Raw Food Exports Continue to Rise, Leading to Higher Prices in Pakistan

Raw food exports in Pakistan have shown significant growth in March, with a 16.35% increase to $685.03 million compared to the same period last year. This upward trend marks the eighth consecutive month of growth in raw food exports, despite the country facing its highest food inflation in history. The Pakistan Bureau of Statistics has compiled this data, highlighting the impact on local consumers who now have to pay higher prices for essential food items across the country.

The commerce ministry recently lifted the ban on onion exports after Eidul Fitr. Despite the average price per kg of onions being above Rs200, there is a growing demand for Pakistani onions following India’s ban on their export. This surge in exports, along with other unchecked food exports, has led to a staggering 16.6% increase in food inflation in March. As a result, prices of key goods like wheat flour, rice, onions, sugar, meat, and vegetables have risen, affecting the purchasing power of cash-strapped individuals.

Non-Textile Exports Show Growth

While the new fiscal year began with negative growth in the export of raw food products, there has been significant improvement since then. From August to February, export proceeds have shown consistent growth, with percentages ranging from 35% in February to 111.63% in December. Analysts attribute this surge in food exports to the sharp depreciation of the Pakistani rupee, as well as disruptions in the global supply chain and increased prices in international markets.

Overall, raw food products and non-textile value-added products have witnessed a growth of 22.4% in the first nine months of the current fiscal year, reaching $10.49 billion. This is a substantial increase compared to the corresponding period last year when the total stood at $8.57 billion.

Rice Exports Lead the Way

One notable area of growth in the raw food export industry is rice. The country’s rice exports have risen by 83.37% in July-March FY24, with basmati rice as the leading contributor. This surge in basmati rice exports can be attributed to India’s ban on rice exports, which has increased demand for Pakistani basmati rice. Basmati rice exports have grown by 36.37% in July-March FY24, contributing $622.34 million to the overall export figures.

In addition to basmati rice, non-basmati rice exports have also increased by 102.15% in the same time period, generating $2.31 billion. However, the rise in basmati rice prices, from Rs150 per kg to Rs400 per kg, has limited its availability for domestic consumers.

Meat and Other Food Product Exports

Pakistan has seen a growth of 28.14% in meat exports, reaching $386.93 million in 9MFY24. The introduction of new markets such as Jordan, Egypt, the United Arab Emirates, Saudi Arabia, and Malaysia has contributed to this increase. Additionally, one meat exporting company has gained market access for heat-treated meat shipments to China. However, the domestic market has experienced a sharp surge in meat prices over the past two years, impacting consumers.

The export of other food products has also shown positive growth, increasing by 21.21% to $876.65 million in 9MFY24. Vegetable exports have reached $336.28 million, showing a rise of 42.79%, while fruit exports have grown by 17.34% to $265.65 million.

Challenges and Declines in Non-Textile Value-Added Products

Although the export of non-textile products had an overall positive growth of 10.87% in 8MFY24, various sectors experienced declines. The export of footwear dropped by 11.30%, leather garments by 7.21%, and carpets and rugs by 21.16%. Additionally, the export of sports goods declined by 6.03%, handicrafts by 68.37%, and furniture by 37%. However, there was a rise in the export of gur products by 19.69%, jewellery by 22.74%, and electric fans by 4.75%. Cement exports showed a significant growth of 32.51% in 9MFY24 compared to the previous fiscal year.

Amidst the challenges and fluctuations in Pakistan’s raw food exports, it is important to consider the impact on local consumers and the need to ensure a steady supply of essential food items at affordable prices.

Source: Dawn