Global Rice News

Headline Inflation Increases to 31.4% in September 2023

In September 2023, Pakistan experienced a significant increase in headline inflation based on the Consumer Price Index (CPI). The inflation rate rose to 31.4% on a year-on-year basis, up from 27.4% the previous month. This steep rise in inflation comes in contrast to the neighbouring countries where inflation rates were relatively low. China reported 0% inflation, India recorded 5.0%, and Bangladesh had 9.6% inflation in September 2023.

Food Inflation Remains High, Despite a Decrease

While the annual food inflation rate decreased from 38.5% in August 2023 to 33.1% in September 2023, it still remains significantly high compared to the inflation rates of neighbouring countries. The high food inflation in Pakistan is attributed to various factors such as fuel price hikes, higher energy and utility costs, rupee devaluation, increased production costs, and higher prices of imported food items. Given the current economic and political uncertainties in the country, prices of essential food and non-food items are expected to remain high in the coming months. In contrast, China reported -3.2% food inflation in September 2023, while India and Bangladesh reported 6.6% and 12.4% respectively.

Rice Prices Experience an Increase

In September 2023, prices of staple cereals such as rice Irri-6 and rice Basmati increased compared to the previous month. Rice Irri-6 saw a 10.4% increase, while rice Basmati experienced a 2.0% increase. These figures represent substantial year-on-year increases of 76.6% for rice Irri-6 and 84.2% for rice Basmati. On the other hand, prices for wheat, wheat flour (subsidized), and wheat flour (Fine) decreased in September 2023 compared to the previous month.

Non-Cereal Food Prices Show Mixed Trends

Certain non-cereal food prices in September 2023 showed an increase compared to the previous month. Prices rose for pulses such as Masoor, Moong, Mash, and Gram, with increases ranging from 6.3% to 16.8%. Additionally, the prices of sugar and eggs also experienced a rise of 7.4% and 1.0% respectively. These figures represent significant year-on-year increases; sugar prices increased by 90.7%, Mash pulses by 37.1% and Moong pulses by 13.1%, while eggs saw a 23.7% increase. On the other hand, prices of live chicken, cooking oil, and ghee decreased in September 2023 compared to the previous month.

Terms of Trade Improve, but Long-term Worsening

In September 2023, the Terms of Trade (ToT), which measure the ratio of daily wage for unskilled labour to the price of wheat flour, showed a small improvement of 2.2% compared to the previous month. However, when compared to September 2022, the ToT worsened by 37.0%. This suggests that while there was a short-term improvement, the long-term trend is negative.

Conclusion

Pakistan is currently grappling with high inflation rates, particularly in the food sector. Staple cereals like rice have seen significant price increases, while non-cereal food items have shown mixed trends. In this challenging economic landscape, it is crucial for local suppliers and exporters to navigate the market effectively. Rice exporters and suppliers in Pakistan can rely on platforms like HAS Rice Pakistan (linked to https://www.hasrice.com) for information on pricing, statistics, and to facilitate their business. Additionally, rice exporters can explore opportunities to expand their reach beyond Pakistan by partnering with international buyers through platforms like Pakistan Rice (linked to https://www.pakistanrice.com).

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