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Pakistan’s agri sector seriously affected

Pakistan’s agri sector seriously affected

Statistics showed that across Pakistan, the fruit and vegetable prices have shot up after flooding destroyed crops and disrupted supplies unluckily. Sources said that the Government of Pakistan sets prices for some fresh produce but traders often ignore them.

Agriculture Growth (Base=2015-16) (%)
Sector 2019-20 2020-21 2021-22 P
Agriculture 3.91 3.48 4.40
1. Crops (i+ii+iii) 6.32 5.96 6.58
i) Important Crops 5.24 5.83 7.24
ii) Other Crops 9.21 8.27 5.44
iii) Cotton Ginning -4.06 -13.08 9.19
2. Livestock 2.80 2.38 3.26
3. Forestry 3.36 -0.45 6.13
4. Fishing 0.63 0.73 0.35

Sources also recorded that in various parts of Pakistan, the prices of dissimilar vegetables have risen 5.0 times high, for one kilogram of onions is being sold at Rs400 to Rs480, tomatoes at Rs250 to Rs300, garlic and ginger at Rs400, capsicum at Rs350, fenugreek (meithi) and cabbage at Rs350, peas at Rs270, ridged gourd (tori) at Rs270, ladyfinger at Rs130, lemon (desi) at Rs200, spinach at Rs85, turnip at Rs120, lemon (Chinese) at Rs200, first category potatoes at Rs100 and second category at Rs90.

It has been discovered that because there is a bigger demand than there is supply for main vegetables such as onion and potatoes, unfortunately sellers are charging outrageous prices for the produce much higher than the official rates in Pakistan. If we analyze the last year 2022 performance of agriculture sector of Pakistan through the statistics released by economic survey of Pakistan, this sector registered a remarkable growth of 4.40 percent and surpassed the target of 3.5 percent and last year’s growth of 3.48 percent.

The crops sector outperformed and recorded a growth of 6.58 percent during 2021-22 against 5.96 percent last year. At sub sectors level, important crops, other crops and cotton ginning depicted a significant growth of 7.24 percent, 5.44 percent and 9.19 percent, respectively, against last year’s growth of 5.83 percent, 8.27 percent and -13.08 percent.

The growth in production of important crops namely cotton, rice, sugarcane and maize were estimated at 17.9 percent, 10.7 percent, 9.4 percent and 19.0 percent respectively. Sources also recorded that monsoon floods have resulted in shortages that have driven up the prices of various staples. Before the present condition, sellers were receiving over 100 trucks [of fresh produce] daily. Now, they receive 10 to 15 trucks only. Pakistan’s 220 million people are already facing rising inflation, with consumer prices up about 25 percent yearly in July.

Statistics also identified that greater than 800,000 hectares of agricultural land had been flooded, destroying most standing crops and preventing farmers from planting anew. People are worried about where the next meal will come from. Because of the current scenario experts predicted to keep inflation rate in Pakistan above 26 percent in September 2022. They also expect that another month of 25 percent+ Year on Year (YoY) Consumer Price Index (CPI) figure, where they expect CPI for September 2022 at 26.4 percent. While this would be lower than August-2022’s figures of 27.3 percent, they expect inflation trend to stay on the higher side owing to higher food inflation and ongoing second-round impacts.

They have also warned that Pakistan will see prices of food items raise further after record monsoon rains in the south and southwest Pakistan. Statistics showed that the food inflation is expected to remain on an upward trajectory, with 275bps Month on Month (MoM) rise in September this year, led by a further sharp rise in tomato prices in the monsoon season. Sindh is the hardest hit, with 697 millimetres of rain so far in the monsoon period, about 466 percent above the 30-year monsoon average.

Pakistan, as a whole, has received about 190 percent more rain than the 30-year average. In Dera Ismail Khan, which lies along the Indus river in central Pakistan, warehouses storing vegetables are already emptying out. The Rice crop has been washed away. Fruit and vegetables are gone. It is said that floodwaters had swept away 700,000 livestock. Statistics released by the officials identified that that Pakistan’s agriculture sector accounts for more than a 5th of the country’s economic output, employing up to 40 percent of the workforce and producing goods worth about $80 billion yearly.

The Government of Pakistan has planned to import duty-free vegetables and other edibles from neighboring countries in order to address the market’s lack of fresh produce.

Inflation In Pakistan-2022
  1. CPI inflation general, grew by 27.3 percent on YoY basis in August 2022 as against to a rise of 24.9 in the last month and 8.4 percent in August 2021. On MoM basis, it raised by 2.4 percent in August 2022 as against to an increase of 4.3 percent in the last month and an increase of 0.6 percent in August 2021.
  1. CPI inflation Urban, also grew by 26.2 percent on YoY basis in August 2022 as against to an rise of 23.6 percent in the previous month and 8.3 percent in August 2021. On MoM basis, it grew by 2.6 percent in August 2022 as against to a rise of 4.5 percent in the last month and an increase of 0.5 percent in August 2021.
  1. CPI inflation Rural, also grew by 28.8 percent on YoY basis in August 2022 as against to an increase of 26.9 percent in the last month and 8.4 percent in August 2021. On MoM basis, it grew by 2.2 percent in August 2022 as against to a rise of 4.2 percent in the last month and an increase of 0.7 percent in August 2021.
  1. SPI inflation on YoY also grew by 34 percent in August 2022 as against to an increase of 28.2 percent a month earlier and an increase of 15.9 percent in August last year. On MoM basis, it increased by 5.2 percent in August this year as against to increase of 7.3 percent a month earlier and an increase of 0.7 percent in August 2021.
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