Global Rice News

Export Surge Leads to Soaring Food Prices in Pakistan

The export of raw food products in Pakistan has experienced a staggering increase of almost 111.63 percent in December. As a result, domestic consumers are now facing higher prices for essential commodities such as wheat flour, rice, sugar, meat, and vegetables. The unchecked exports have led to a food inflation rate of 28.8 percent in December 2023, causing accessibility issues for the general population.

Since October 2023, raw food exports in the country have witnessed a significant rise, while exports from the manufacturing sector have remained stagnant for several months. According to data released by the Pakistan Bureau of Statistics (PBS), food exports grew by 49.84 percent in the first half of fiscal year 2023-24, amounting to $3.48 billion, compared to $2.32 billion during the same period last year.

Rice Export Surge and Basmati Rice Prices

The surge in food exports can be attributed to the drastic depreciation of the rupee. Additionally, disruptions in the supply chain and higher international market prices have contributed to the growing demand for food products. Basmati rice exports have experienced a notable surge of 30.03 percent, reaching $367.39 million in July-December FY24. This increase is partially linked to India’s ban on rice exports.

Non-basmati rice exports have also seen a significant rise, increasing by 96.88 percent to $1.64 billion in July-December 2023-24. However, the sustained surge in export figures over the past two years has led to a surge in the average price of basmati rice, reaching Rs380 per kg from Rs150 per kg. This price increase has made it difficult for domestic consumers to afford basmati rice.

Meat Exports and Rising Meat Prices

Pakistan exported $239.71 million worth of meat in 6MFY24, showing a growth of 24.90 percent compared to the previous year. The introduction of new markets such as Jordan, Egypt, and Uzbekistan has contributed to the increase in meat exports. Furthermore, Pakistan has gained market access for meat shipments to countries like China, the United Arab Emirates, Saudi Arabia, and other Gulf nations.

However, the prices of meat in the domestic market have experienced an unparalleled surge in recent years. The average price of buffalo meat has jumped from Rs700 per kg to Rs1,250 per kg in just two years. Similarly, the price of chicken has also reached its highest level in the last two years.

Other Food Exports and Fish Decline

The export of fruits in Pakistan has seen an increase of 9.31 percent in the first half of FY24, amounting to $171.28 million. Additionally, the export of all other food products has risen by 22.62 percent to $616.81 million during 6MFY24.

However, the export of fish and fish products has witnessed a decline of 11.63 percent, dropping from $225.21 million to $199.02 million in the first half of FY24.

Conclusion

The surge in exports has had a significant impact on food prices in Pakistan, with the average prices of beef, chicken, and rice doubling in just two years. While the export growth presents economic opportunities for the country, it underscores the challenges faced by domestic consumers who are grappling with skyrocketing prices. Efforts must be made to address this issue and ensure affordable access to essential commodities for all.

Source: Dawn