The world is seeing a sharp increase in the rise of food prices.
The world is seeing a sharp increase in the rise of food prices. This is a growing issue that usually seems to take a back seat to others like petroleum prices, dollar parity or other economic indicators. But the effect of food inflation on the economy is not something that can be ignored. Especially by a country like Pakistan.
To avert a fallout on the Pakistan economy, wheat production during 2010-11 should touch 25 million tons against a requirement of 23.5 million tons so that surplus is available for export and strategic reserves.
It is too early to predict the output, however, there are concerns about late cultivation, a reduction in the sowing area, dry weather, high prices of urea, and so on, a situation that was not helped by the floods.
Food prices are a domestic affair for most countries as only 12 per cent of cereals produced globally are traded across borders. In food self-sufficient countries such as China, Russia and India, buyers often pay prices set by the government which are unlinked to global markets.
World wheat prices have doubled recently after a drought and fires in Russia, one of the top five exporters of the world. The price shot up on August 19 from $241 to $250 per ton as news spread that Russia might need to import wheat, which the Russian government has not accepted.
And with international prices rising, Pakistan will have to ensure that it does not depend on imports to cover any shortfall in production. Pakistan had two consecutive bumper harvests of around 24 million tons in 2008-09 and again in 2009-10. Hence wheat stock is not a problem for the current fiscal. In fact the federal government has even allowed the export of wheat.
But measures will have to be taken to ensure that the loss of cultivated area to the floods does not translate into a shortage in the coming year, or years.
Pakistan’s main wheat-growing area is in Punjab that produces 16 to 17 million tons of wheat which is about 76 percent of the total production of the country and is one of the areas vastly affected by the floods. In this backdrop Punjab has targeted cultivation of wheat on 6.836 million hectares which will hopefully produce 19.205 million tons. This should help alleviate some concerns about the looming shortage of wheat and the subsequent food insecurity.
Nationally, the position is satisfactory as stocks from the bumper wheat crops of 2008-09 and 2009-10 are still available, but individual reserves have been washed away due to floods or have been damaged, so there could be localised food insecurity. At least 3.2 million hectares of standing crops, including rice, maize, cotton, sugarcane, fruit orchards and vegetables, have been damaged or lost to the floods – which represents some 14 percent of the total cropped area.
All that area could not be brought under wheat cultivation due to standing water or wet soil. Wheat crop during Rabi season 2010-11 has seen dry season prevailing during the months of November and December while normal precipitation is expected during January to March 2011 which will be encouraging for the Rabi season crops. The last week of December remained foggy, which is also beneficial because of reduced transpiration and more humidity for which is beneficial for wheat. Similarly, cooler temperatures will favour tillering of crop especially if sown late. Rainfall in the end of December proved useful.
Sufficient water is reported ly available to meet all future indents and there should be no shortage. Wheat experts say that in Punjab varieties Seher-06, Inqilab 91, Bhakkar 02, Wattan (un-approved) and AS-02 were planted, while this year higher yielding variety Seher-06 was sown on maximum area, including newly approved varieties like Faisalabad 08, Lassani 08, Meraj 08, Shafaq 06, Freed 06, Chakwal 50 and BARS 09. According to these experts this will also help enhance the per acre yield.
The temperature in March and April is critical in Punjab as witnessed during 2009-10 during which grain shriveled up and targets remained elusive. The farmers have to learn to deal with rising temperature though application of additional water and fertiliser to compensate loss of energy in survival against stresses. It is not going to be easy, but the alternative is sky-rocketinginflation and food insecurity, or maybe worse.
The writer was formerly Faisalabad correspondent for Dawn.
Published in The Express Tribune, January 17th, 2011.