Why is there a wheat crisis in Pakistan?

Experts say that the crisis has been caused by several reasons, the first being the Russia-Ukraine war

By DTE Staff
Published: Wednesday 25 January 2023

On January 7, 2023, a stampede in Sindh claimed the life of a 35-year-old man. What was the reason for the stampede? Wheat.

For weeks now, the cost of wheat flour in Pakistan has been uncomfortably high. In Karachi, Islamabad and Peshawar flour is being sold for 140-160 Pakistani Rupees per kilogram, doubling from about a year ago.

Khyber Pakhtunkhwa and Balochistan have seen protests over wheat. Experts say that the crisis has been caused by several reasons, the first being the Russia-Ukraine war.

In 2020, the country imported wheat worth about a billion dollars, most of which came from Ukraine ($496 million) and Russia ($394 million). While the war (which started about a year ago) halted that import, the floods of 2022 pulled down the domestic yield and further caused agriculture and livestock losses worth $5.6 billion.

Punjab (2.7 million acres) and Sindh (4.8 million acres), two wheat producing regions in the country were inundated. Moreover, an inter-ministerial meeting in December noted that the food security challenges were inflating because of the smuggling of wheat to Afghanistan along the country’s western borders, especially Khyber Pakhtunkhwa.

An additional problem apart from these international issues is the domestic issue of distribution of existing stock. The provincial governments first provide wheat to mills from government warehouses.

The mills then provide the flour to retail markets. Provinces can request the central Pakistan Agricultural Storage and Services Corporation (PASSCO) warehouses for more stocks in case of a shortage.

The smaller chakkis (flour grinders) buy directly from the farmers. While the central government claims that Punjab and Sindh did not release stocks on time, locals claim that mill owners hoarded stocks and sold them at high prices to those willing to pay.

To ease this burden, the country has already imported 1.3 million metric tonnes of wheat this year from Russia, but this expense could be challenging since foreign reserves are lower than $5 billion right now.

A 2022 World Bank report on Pakistan’s agriculture said that despite public spending with support from development partners, agriculture growth slowed down from an average of over four per cent per year between 1970 and 2000 to below three per cent thereafter.

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