Flour prices, reaching their highest levels in the country’s history, are bound to make the cost of living increasingly unsustainable for millions.
Wheat prices have gradually increased since August. In the last week alone, Karachi, Hyderabad and Quetta have seen increases of Rs 100, bringing the total price for a 20kg sack of flour to over Rs 2500. Currently, prices in Islamabad and Punjab are a bit more bearable, but not for long. The rise correlates with a broader atmosphere of food insecurity in the world market, and it is estimated that the rise in food prices over the past decade could push 100 million people in low-income countries deeper into poverty, particularly those living in cities live areas. The shocks to global grain production, catalyzed by a war between the world’s two largest grain producers, Russia and Ukraine, are partly to blame. But most of the blame lies with the profit-seeking grain-trading agribusinesses, who have raised their prices without being questioned. Financial speculation on the wheat futures markets has also caused prices to rise.
In Pakistan, wheat prices are set by the Ministry of Food, Agriculture and Livestock at the start of the harvest season, and procurement prices often exceed the support price, depending on recent particularly volatile market conditions.
While wheat accounts for only 0.5% of the consumer price index, wheat and wheat products make up 5.1% of the CPI basket. Demand has been unusually high this year, particularly in flood-hit areas, and it seems the government is unable to withstand the pressure.
The federal government continues to deny claims of a wheat shortage, even though earlier this year the country approved a deal to import almost 300,000 tons of wheat from Russia. Water shortages and damaged farmland from the floods have left Pakistan in a precarious position as it struggles to make up for reduced harvests. Millions of people in Pakistan are expected to starve and starve this year as staple foods are out of their reach. It is important that the government pulls together and puts in place stabilization mechanisms to regulate the price of wheat before the situation worsens. *
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