Surging food exports hitting domestic buyers

ISLAMABAD: The export of raw food products recorded an upsurge of almost 60 per cent in October compelling domestic consumers to pay higher prices.

These unchecked exports pushed the food inflation to a staggering 29pc in October as prices skyrocketed affecting accessibility to essential commodities, particularly wheat flour, rice, sugar, meat and vegetables.

Food exports grew 30.29 per cent in the first four months of fiscal year 2023-24 to $1.944 billion from $1.492bn over the corresponding months of last year, according to data released by the Pakistan Bureau of Statistics (PBS).

The surge in food exports can be attributed to the unprecedented rupee depreciation. In addition, persistent disruptions in the supply chain and higher prices in the international market have led to soaring demand for food products.

The PBS data showed the country’s rice exports rose 30.12pc in July-October FY24 led by basmati rice, which had been falling since last year.

The export of basmati rice experienced a notable surge of 23.13pc, reaching $225.56 million in July-October from $183.18m in the corresponding period last year.

India’s recent decision to impose a ban on rice exports has emerged as a key driver behind the surge in basmati rice exports.

According to PBS data, the export of non-basmati rice rose 33.64pc to $485.22m in July-October 2023-24 from $363.07m in the same period last year.

Due to a sustained surge in export figures over the past two years, the average price of basmati rice has surged Rs350 per kg from Rs150, restricting buying from domestic consumers.

Pakistan exported $152.58m worth of meat in 4MFY24 from $128.46m over the last year, showing a growth of 18.77pc. The reason for the increase in meat exports is the introduction of new markets like Jordan, Egypt, and Uzbekistan.

At the same time, several new enterprises are registering to export meat to the United Arab Emirates, Saudi Arabia and other Gulf nations.

Malaysia also cleared another three slaughterhouses for export/processing. Furthermore, one meat exporting company was granted market access for heat-treated meat shipments to China.

The prices of meat in the domestic market have experienced an unparalleled surge in recent years. In two years, the average price of buffalo meat has jumped from Rs700 per kg to Rs1,200 per kg. This increase has caught the attention of market observers and stakeholders alike. The price of chicken has also experienced an unprecedented surge, reaching its highest level in the last two years.

During the period spanning from February to August, the sugar export figures reached an impressive 248,854 tonnes against no exports recorded over the comparable period of last year. The Economic Coordination Committee imposed an export ban from Aug 10. This decision came amidst a surge in the retail price of sugar, reaching an unprecedented high of Rs200 per kilogramme.

Since March 2022, the sugar industry has persistently sought approval for the export of excess quantities, particularly when prices were hovering between Rs80-85 per kg in the domestic market. However, it was not allowed until February 2023 that the PMLN-led coalition government granted the industry’s request on pressures exerted by coalition partners, notably the Pakistan People’s Party (PPP), the decision was reached.

The export of fruits saw an increase of 13.53pc in the first four months to $108.99m against $96.003m over the last year. The export of all other food products saw an increase of 13.88pc to $404.52m in 4MFY24 from $355.22m over the corresponding months of last year.

Pakistan exported fish and fish products worth $123.86m in the first four months of FY24, showing a decline of 7.96pc from a year ago of $134.57m.