Wheat and sugar shortage pushes Pakistan into crisis

Bread and games are important to keep the people calm. This has been known for a long time, and is now confirmed by a crisis in Pakistan. There is a shortage of wheat and sugar in the country. This results in great pressure on the government, and Pakistan must now import wheat.

In shops, the price of flour and bread has risen sharply, because wheat is no longer available from wholesalers. Bakers in the country are protesting because they have to sell bread for prices set by the government. According to them, the price of wheat is too high to be able to sell profitable bread at the government price.

Export despite shortage
Due to a bad growing season, wheat production in Pakistan is considerably less. Despite this, the country has exported wheat, even after exports were halted. In recent years (2017-2018), Pakistan still exported 1 million tons of wheat. This year it is only 48.000 tons.

Despite that, opposition parties in Pakistan are angry about this. They find it irresponsible that wheat has been exported, despite the bad harvest in 2019. They are currently using the wheat shortages as a reason to attack the current government.

Import required
To deal with the current crisis, Pakistan will import 300.000 tons of wheat. That is a unique situation for a country that normally exports. Although 300.000 tons is not an extremely large volume in the global wheat market, Pakistan is unlucky, because the country has to buy the wheat in a market that the rising line got hold of. On Monday, the Matif in Paris reached a closing price of €195,80 for the March contract. That is the highest level since August 2018.

Sugar deficiency
Besides the wheat shortage, there is also a shortage of sugar in Pakistan. The sugar price in the country shot up and has doubled compared to last year. Again, Pakistan is normally a decent sugar producer itself. In recent years, more than 5 million tons of sugar was produced per year.

Anne-Jan Doorn

Anne Jan Doorn is an arable expert at Boerenbusiness. He writes about the various arable farming markets and also focuses on the land and energy market.

aj.doorn@boerenbusiness. Nl

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