Food Price Hikes Badly Hurting Average Pakistani Consumers

[RiazHaq]

Food Price Hikes Badly Hurting Average Pakistani Consumers

News, analysis and opinions about India, Pakistan, US, Canada, Europe, Mid East, South Asia, Silicon Valley, High Technology, Economy, Politics, World

www.riazhaq.com

Global food prices are soaring by double digits amid the coronavirus pandemic, according to Bloomberg News. Bloomberg Agriculture Subindex, a measure of key farm goods futures contracts, is up almost 20% since June. It may in part be driven by speculators in the commodities markets. These rapid price rises are hitting the people in Pakistan and the rest of the world hard. In spite of these hikes, Pakistan remains among the least expensive places for food, according recent studies. It is important for Pakistan's federal and provincial governments to rise up to the challenge and relieve the pain inflicted on the average Pakistani consumer.

Global Agricultural Futures Contracts. Source: Bloomberg

Global Food Prices:

Global food prices are increasing at least partly due to several nations buying basic food commodities to boost their strategic reserves in the midst of the pandemic. A Bloomberg News report says that "agricultural commodity buyers from Cairo to Islamabad have been on a shopping spree since the Covid-19 pandemic upended supply chains". It may in part be driven by speculators in the commodities markets. Here's an excerpt of the Bloomberg story:
"Agricultural prices have been on the rise as countries stepped up purchases, adding to demand from China and a drought in the Black Sea region. That has helped push the Bloomberg Agriculture Subindex, which measures key farm goods futures contracts, up almost 20% since June. Sugar prices have gained a boost as China replenished stockpiles, said Geovane Consul, chief executive officer of a Brazilian sugar and ethanol joint venture between U.S. agribusiness giant Bunge Ltd. and British oil major BP Plc."

Global Food Price Comparison. Source: Bayut

Food Prices in Pakistan:
The food prices have risen 14% for urban and 16.8% for rural areas of Pakistan in the last 12 months, according to Pakistan Bureau of Statistics. In spite of this inflationary trend, the grocery prices in Pakistan remain among the lowest in the world. A comparison by Dubai-based Bayut shows that groceries in Pakistan cost 72.9% less than in the United States. Other least-expensive countries for groceries include Tunisia ( 67% less), Ukraine ( 66.7% less), Egypt (65.6% less) and Kosovo (65.6% less).
Globally, Switzerland sells the most expensive groceries, with prices 79.1% higher than in the U.S. Norway is the second most expensive place to buy groceries, with prices 37.4% more expensive than in the U.S., and Iceland is third most expensive, where food items are 36.6% pricier, according to Bayut.
Summary:
Global food price hikes have hit average Pakistani hard in spite of the fact that grocery prices in Pakistan remain the lowest the world. Bloomberg Agriculture Subindex, a measure of key farm goods futures contracts, is up almost 20% since June. It may in part be driven by speculators in the commodities markets. World food commodity prices are increasing at least partly due to several nations buying basic food commodities to boost their strategic reserves in the midst of the pandemic. It is important for Pakistan's federal and provincial governments to intervene in the markets to relieve the average Pakistani consumer's pain.
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Food Price Hikes Badly Hurting Average Pakistani Consumers

News, analysis and opinions about India, Pakistan, US, Canada, Europe, Mid East, South Asia, Silicon Valley, High Technology, Economy, Politics, World

www.riazhaq.com

 

[darksider]

In Pakistan corona is not only one reason of rising food prices.this incompetent gov also played its roles by allowing sugar and wheat mafias to do whatever they want.
Prices of medicines also skyrocketing.goverment have no grip.

 

[Marker]

In Pakistan corona is not only one reason of rising food prices.this incompetent gov also played its roles by allowing sugar and wheat mafias to do whatever they want.
Prices of medicines also skyrocketing.goverment have no grip.

Members of this mafia were/are part of the government. These people are doing under the nose of legendary Imran Khan.

Wake up Imran Khan! Do not compromise yourself for the sake of power. True power will come when you get rid of these leaches from your surroundings. Then no Fazlullah, no Zardari and no Nawaz will harm you.

 

[TheSnakeEatingMarkhur]

In Pakistan corona is not only one reason of rising food prices.this incompetent gov also played its roles by allowing sugar and wheat mafias to do whatever they want.
Prices of medicines also skyrocketing.goverment have no grip.

True Govt failed to stop Mafias but another reason is no subsidy as given by previous govt from loan money and also dollar exchange rate which is set according to free market now unlike previous ones who set artificial dollar exchange rate that too using loan money...

 

[RiazHaq]

"Soaring prices of agricultural products are stoking food-security jitters in China. According to the China’s National Bureau of Statistics, food prices went up by 13 percent in July, compared to the previous July; the price of pork rose about 85 percent. On a year-on-year basis, food prices have increased by 10 percent in 2020 — the price of corn is 20 percent higher and the price of soybeans, 30 percent"

https://thehill.com/opinion/interna...ng-china-struggles-to-meet-basic-food-demands
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India ranks 94th among 107 nations ranked by World Hunger Index in 2020. Other South Asian have fared better: Pakistan (88), Nepal (73), Bangladesh (75), Sri Lanka (64) and Myanmar (78) – and only Afghanistan has fared worse at 99th place. The COVID19 pandemic has worsened India's hunger and malnutrition. Tens of thousands of Indian children were forced to go to sleep on an empty stomach as the daily wage workers lost their livelihood and Prime Minister Narendra Modi imposed one of the strictest lockdowns in the South Asian nation. Pakistan's Prime Minister Imran Khan opted for "smart lockdown" that reduced the impact on daily wage earners. China, the place where COVID19 virus first emerged, is among 17 countries with the lowest level of hunger.

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[maithil]

According to Govt aligned economic analyst, staple food items have seen a rise of much more than 14%.. He may very well be downplaying real inflation ..

https://twitter.com/x/status/1313707169125208064

 

[RiazHaq]

Global #food prices rise as countries stockpile amid worsening #coronavirus #pandemic. In times of uncertainty, people are more likely to hoard. Countries importing grains to boost their pandemic stockpiles include #China, #Egypt, #Jordan, #Taiwan, others. https://www.marketplace.org/2020/10...-countries-stockpile-amid-worsening-pandemic/

A number of countries, including China, are stockpiling for an uncertain pandemic season amid concerns over whether the global supply chain for food can remain intact as COVID-19 cases rise worldwide.

World food prices have been rising for four straight months, according to a United Nations price index. Countries importing grains to boost their pandemic stockpiles include Egypt, Jordan, Taiwan and others.

“China comes to mind, as they’ve taken on a massive restocking program,” said Michael Magdovitz, food and agriculture analyst at Rabobank. “But also India. Countries may increase their buffers to avoid any supply-side issues,” such as lockdowns or border closures should the pandemic worsen.

“I think people are trying to protect their own interests, which in some ways is rational,” Preston said. “Even if it can cause what they call a ‘commons problem,’ where then there’s not enough for everybody.”

When the pandemic first hit, governments and food security authorities expressed concerns about food protectionism. That didn’t come to pass globally.

Still, bottlenecks have turned up in developing countries. In South Africa, workers were banned from traveling to a packing plant for citrus, said Thomas Reardon, agricultural economist at Michigan State University.

“Also, because wood was not classed as an essential item, the wood was not coming in to make packing crates, so the fruit could not be packed,” Reardon said.

Globally, the prices of grain and meat continue to rise, just as more and more people can’t afford them given widespread job losses. Sherman Robinson, trade scholar at the Peterson Institute for International Economics, said food insecurity is showing up everywhere.

“It’s widespread across developing countries,” Robinson said. “In the developed countries, it really depends on how good your social safety net is. So in the U.S. case, we’re probably among the worst of the developed countries.”

 

[notorious_eagle]

If PTI does not contain inflation, they can forget about forming the next Government. Inflation is out of control, food is so expensive. I don't know how someone with a salary of 20 000 Rupees runs their house.

 

[AZ1]

If PTI does not contain inflation, they can forget about forming the next Government. Inflation is out of control, food is so expensive. I don't know how someone with a salary of 20 000 Rupees runs their house.

One thing I don't understand is why IK is not using reserve money to give subsidy? what he is waiting for? we already passed $20 billion. So why not used that money or we can not use that money to give subsidy?

Also people looting people pattern I am seeing. Like sabzi wala came at our house giving tomatoes 200/kg

while if I go to bazar it is 130/kg.

even in 130/kg he is saving money but yet 200/kg when come on street.

 

[Type59]

No one mentioned locust infestation and heavy rain destroying crops.

 

[blueazure]

According to Govt aligned economic analyst, staple food items have seen a rise of much more than 14%.. He may very well be downplaying real inflation ..

https://twitter.com/x/status/1313707169125208064

worry about the 70 million hungry and below poverty line souls who sell themselves for a bread loaf

--------------

 

[TheDarkKnight]

This scares me 100x more as a PTI well wisher, than any of the topi drama being done by PDM.

 

[IceCold]

There is a danda coming on this. Names have been identified both within the business domain as well as bureaucracy and their contacts with political parties. The price isnt hiked because of inflation but because of these black sheeps trying to create a panic within the public to start a protest against PTI government. Coming days will be interesting and enemies of Pakistan will be behind bars, Allah willing.

 

[RiazHaq]

Please watch this discussion:

Pakistan's economy has been hit hard by one-two punch: a balance-of-payments crisis and the coronavirus pandemic. Food prices have soared in Pakistan and the world as uncertainty about the pandemic has increased speculation and hoarding of basic foods. Bloomberg Agriculture Subindex, a measure of key farm goods futures contracts, is up almost 20% since June. There's anger and impatience among Pakistanis that is creating an opportunity for PDM to direct it at Prime Minister Imran Khan's government. Will the PTI government be able to address these issues and survive the Opposition's onslaught?

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[Norwegian]

According to Govt aligned economic analyst

He is a jobless idiot. Who told you he is even an economist or aligned with govt?

If PTI does not contain inflation, they can forget about forming the next Government. Inflation is out of control, food is so expensive. I don't know how someone with a salary of 20 000 Rupees runs their house.

You cannot control inflation when there are mafia cartels hoarding essential food items such as wheat and sugar. When govt went in to break them, IHC, SHC and later LHC put stay on govt crackdown. This country is ungovernable until establishment, judiciary's interference in govt affairs is completely stopped.

One thing I don't understand is why IK is not using reserve money to give subsidy? what he is waiting for? we already passed $20 billion. So why not used that money or we can not use that money to give subsidy?

IK is unwilling to repeat past govt mistakes. Govt subsidy should not be given to all but only those that actually need it.

Will the PTI government be able to address these issues and survive the Opposition's onslaught?

Yes