Surging food exports hit local consumers

ISLAMABAD: The export of raw food products consecutively surging for the sixth month in the current fiscal year forcing local consumers to pay higher prices.

The food export value more than doubled to $787.36 million in January, up 105.29 per cent from $383.54m in the same month last year, according to data compiled by the Pakistan Bureau of Statistics.

The new fiscal year began with negative growth of 7.56pc, but it improved to positive growth of 4.07pc in August, and export proceeds grew further by 60.89pc in September, 59.90pc in October, 60.65pc in November and 111.63pc in December.

These unchecked exports drove food inflation to a stunning 27.4pc in January, as prices rose, limiting access to key goods such as wheat flour, rice, sugar, meat, and vegetables. Food inflation has been 29pc on average since October 2023.

Proceeds jump 58pc to $4.29bn in July-January

Food exports grew 57.66pc in the first seven months of 2023-24 to $4.26 billion from $2.70bn in the corresponding months of last year.

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 95.26pc in July-January FY24 led by basmati rice, which had been falling since last year.

The export of basmati rice experienced a notable surge of 35.59pc, reaching $456.94m in July-January FY24 from $337m in the corresponding period last year. India’s recent decision to impose a ban on rice exports to protect the interest of domestic consumers has emerged as a key driver behind the surge in basmati rice exports from Pakistan.

The export of non-basmati rice rose 122.21pc to $1.65bn in July-January 2023-24 from $746.43m 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 to Rs390 per kg from Rs150, restricting buying from domestic consumers.

Pakistan exported $288.14m worth of meat in 7MFY24 from $226.86m over the last year, showing a growth of 27.01pc. 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 and half years, the average price of buffalo meat has jumped from Rs700 per kg to Rs1,250 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.

The export of all other food products saw an increase of 23pc to $701.35m in 7MFY24 from $566.29m in the corresponding months of last year. The export of vegetables reached $72.947m in seven months this year against $40.466m over the corresponding month of last year.

On the other hand, Pakistan imported wheat 613,147 tonnes in January, up 6.67pc from 447,560 tonnes over the corresponding month of last year. Pakistan began importing wheat in September 2023 despite the government’s claims of having a bumper wheat crop.

The import of sugar also saw an increase of 26.12pc as it stood at 441 tonnes in January FY24 from 316 tonnes over the corresponding month of last year. The average sugar price in the country is around Rs160 per kg.