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Pakistan Wheat Output May Miss Target, Fueling Rally (Update1)
By Khalid Qayum
April 8 (Bloomberg) -- Pakistan's wheat crop, Asia's third biggest, may be 2 million tons less than forecast, supporting a global rally in prices that threatens food security.
Output may total 22 million metric tons, less than the 24 million ton target set in October, said Qadir Baksh Baloch, a spokesman for farm ministry, by phone from Islamabad today. The new forecast equals the nation's current wheat consumption.
Pakistan may need to import wheat for a second year if the harvest declines, supporting global prices that have more than doubled in the past year. Wheat costs in the South Asian nation have climbed more than 20 percent since October amid smuggling into neighboring Afghanistan, which is facing food shortages.
``Pakistan will need to import 500,000 tons to 1 million tons,'' said Farhan Rizvi, economist at JS Capital Markets Ltd. in Karachi. ``The country may just meet its domestic needs but if we account for smuggling, we will need to import.''
The price of wheat flour is equivalent to about 30 rupees (48 U.S. cents) a kilogram in Afghanistan, compared with 20 rupees in Pakistan, fueling cross-border smuggling, Baloch said.
Pakistan wants to cut flour prices by half to keep staple food costs affordable to the nation's 160 million people. The government sent troops to guard flour mills at the start of this year to prevent illegal hoarding.
Farmers cultivate wheat in November and December and harvest the crop from April to June. Harvesting has begun in the southern Sindh province while Punjab, which produces 80 percent of the nation's wheat, will start gathering in a few days, Baloch said.
Wheat for July delivery climbed as much as 0.9 percent to $9.4325 a bushel on the Chicago Board of Trade today. Prices reached a record $13.495 on Feb. 27.
Fertilizer Prices
The use of fertilizer halved from a year ago to 600,000 tons after prices climbed 44 percent, Baloch said. The area planted to wheat is 2 percent less than a year ago, he said.
Record raw-material prices are fueling inflation, prompting governments to impose price controls and curb exports. The World Bank says 33 nations from Mexico to Yemen may face social unrest after food and energy costs rose for six straight years.
Inflation may climb to 9 percent this fiscal year to June 30, exceeding the target of 6.5 percent, Pakistan's central bank estimates. Prices reached a 33-month high in January.
In neighboring India, the world's second-biggest grower of wheat, wholesale prices rose to a three-year high. Prime Minister Manmohan Singh's government has scrapped import duties on edible oils and banned exports of rice and pulses to bolster supplies.
Philippine President Gloria Arroyo said today she would jail anyone found guilty of ``stealing rice from the people.''
The Southeast Asian nation is the biggest importer of rice, the price of which has more than doubled to a record $21.50 per 100 pounds in Chicago.
By Khalid Qayum
April 8 (Bloomberg) -- Pakistan's wheat crop, Asia's third biggest, may be 2 million tons less than forecast, supporting a global rally in prices that threatens food security.
Output may total 22 million metric tons, less than the 24 million ton target set in October, said Qadir Baksh Baloch, a spokesman for farm ministry, by phone from Islamabad today. The new forecast equals the nation's current wheat consumption.
Pakistan may need to import wheat for a second year if the harvest declines, supporting global prices that have more than doubled in the past year. Wheat costs in the South Asian nation have climbed more than 20 percent since October amid smuggling into neighboring Afghanistan, which is facing food shortages.
``Pakistan will need to import 500,000 tons to 1 million tons,'' said Farhan Rizvi, economist at JS Capital Markets Ltd. in Karachi. ``The country may just meet its domestic needs but if we account for smuggling, we will need to import.''
The price of wheat flour is equivalent to about 30 rupees (48 U.S. cents) a kilogram in Afghanistan, compared with 20 rupees in Pakistan, fueling cross-border smuggling, Baloch said.
Pakistan wants to cut flour prices by half to keep staple food costs affordable to the nation's 160 million people. The government sent troops to guard flour mills at the start of this year to prevent illegal hoarding.
Farmers cultivate wheat in November and December and harvest the crop from April to June. Harvesting has begun in the southern Sindh province while Punjab, which produces 80 percent of the nation's wheat, will start gathering in a few days, Baloch said.
Wheat for July delivery climbed as much as 0.9 percent to $9.4325 a bushel on the Chicago Board of Trade today. Prices reached a record $13.495 on Feb. 27.
Fertilizer Prices
The use of fertilizer halved from a year ago to 600,000 tons after prices climbed 44 percent, Baloch said. The area planted to wheat is 2 percent less than a year ago, he said.
Record raw-material prices are fueling inflation, prompting governments to impose price controls and curb exports. The World Bank says 33 nations from Mexico to Yemen may face social unrest after food and energy costs rose for six straight years.
Inflation may climb to 9 percent this fiscal year to June 30, exceeding the target of 6.5 percent, Pakistan's central bank estimates. Prices reached a 33-month high in January.
In neighboring India, the world's second-biggest grower of wheat, wholesale prices rose to a three-year high. Prime Minister Manmohan Singh's government has scrapped import duties on edible oils and banned exports of rice and pulses to bolster supplies.
Philippine President Gloria Arroyo said today she would jail anyone found guilty of ``stealing rice from the people.''
The Southeast Asian nation is the biggest importer of rice, the price of which has more than doubled to a record $21.50 per 100 pounds in Chicago.
