USDA Forecasts Bumper Harvest of Major Crops in Pakistan For 2023/24

The United States Department of Agriculture (USDA) is forecasting bumper harvest of all major crops in Pakistan for 2023/24. Major crops in the country include wheat, rice, sugarcane, corn and cotton. These offer welcome relief for Pakistani farmers who suffered devastating losses in the epic floods of 2022.   

Major Crops Produced in Pakistan. Source: USDA

Pakistan is projected to produce 28 million tons of wheat,  10.5 million tons of corn (maize), 9 million tons of rice, 6.5 million bales of cotton, 7.8 million tons of sugar and 540,000 tons of rapeseed (canola) in 2023/24. Each of these production figures is significantly higher than last year's, and higher than the last 5-year average (2018-22) for the country. Potato production jumped 50% to 7.74 million tons in 2022, according to PotatoBusiness.  

Sugar Production in India and Pakistan. Source: Ragus

Pakistan will still need to import wheat but a lower amount than last year, according to a Global Agricultural Information Network report from the Foreign Agricultural Service (FAS) of the US Department of Agriculture. The record harvest will help lower the country’s forecasted import needs from 3 million to 2 million tons in 2023-24 even as total consumption grows to 30.2 million tonnes from 29.2 million tons. Pakistan imported 2.6 million tons last marketing year.

Higher cotton production in Pakistan will result in 2.3 million tons of cottonseed oil in 2023/24, a 34% increase over the 2022/23 output. This increase reflects expectations for a recovery in yield following the flood-damaged 2022/23 output. This will help reduce cooking oil imports, the country's largest food import, this year. Last year, Pakistan imported $4.5 billion worth of edible oil

Pakistan expects to export 5 million tons of rice worth $3 billion this year. India's ban on non-basmati rice exports will likely help Pakistani exporters fetch higher prices on the world market. 

Global Rice Market 2023. Source: Reuters

Pakistan's agriculture output is the 10th largest in the world. The country produces large and growing quantities of cereals, meat, milk, fruits and vegetables. Currently, Pakistan produces over 40 million tons of cereals (mainly wheat, rice and corn), 17 million tons of fruits and vegetables, 70 million tons of sugarcane, 60 million tons of milk and 4.5 million tons of meat.  Total value of the nation's agricultural output exceeds $50 billion. Improving agriculture inputs and modernizing value chains can help the farm sector become much more productive to serve both domestic and export markets.  

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Comment by Riaz Haq on August 9, 2023 at 10:11pm

Pakistan’s potato production soared to 7.9m tonnes in Fiscal Year 2022 from 5.8m tonnes in FY 2021, up by 35% as floods did not hit Punjab which is a hub of potato production, Pakistan Today! cited data reveals.


https://www.potatobusiness.com/market/pakistan-can-become-one-of-ch...


There is a gradual increase in potato production in this country. During 2020, potato production was estimated to be 4.55m tons utilizing the cultivated area of 234,400 hectares. However, in the 2021- 2022 season, according to the Ministry of National Food Security and Research Statistics (MNFS&R), potato production jumped to 7.74m tons, which is an increase of almost 50% as compared to the last year.

Pakistan potato is exported mainly to CIS (Commonwealth of Independent States) countries like Russia, Azerbaijan, Iraq, UAE, Oman, the entire gulf, and Singapore, Malaysia in the Far East.

In Pakistan, potato is the fourth most important crop after wheat, rice, and corn. It is one of the four major staples that significantly contribute to national domestic consumption and food needs.

Fresh potato production for the 2022-2023 Marketing Year (September to August) is forecast at 93m metric tons (MMT), a slight decrease from the estimated 95 MMT produced in MY 2021-2022 owing to reduced acreage. According to industry sources, the potato planting area decreased in the northern single crop zone, especially in northeast China, due to government incentives and price supports intended to boost soybean production.

Low prices at the start of the harvest season in the Southwestern, Central, and Winter crop zones, which account for half of China’s fresh potato production, also contributed to the reduction in planted area for MY 2022/23. According to China’s 2022 Agricultural Outlook Report on Potatoes, the average wholesale price of fresh potatoes in 2021 was USD0.15/lb., a 12.7% decline from 2020, and the lowest level in six years.

Comment by Riaz Haq on August 10, 2023 at 5:06pm

Dependency ratio is the ratio of children (under 15) and retirees (65 and above)) to working age (15-64 years) people in a population. Countries with high dependency ratios tend to perform poorly relative to countries with low dependency ratios in terms of economic growth.

A recent NY Times article by Lauren Leatherby titled "How a Vast Demographic Shift Will Reshape the World" uses charts and graphics to show how the world economic landscape will change during the rest of the century.

It shows that Pakistan will join the top 10 countries with highest share of working age population and lowest dependency ratios.

https://www.nytimes.com/interactive/2023/07/16/world/world-demograp...

Pakistan will join top 10 countries in working age population in 2050

Bangladesh is already in the top 10 working age population countries today.

https://www.nytimes.com/interactive/2023/07/16/world/world-demograp...


Countries are categorized as having large working-age populations if people between the ages of 15 and 64, an age group commonly used by demographers, make up at least 65 percent of the total population.

Countries where at least a quarter of the population is under age 15 and where less than 65 percent of the population is working age are categorized as having a large young population. Countries are categorized as having a large old population if those age 65 and older make up more than a quarter of the population.

Unless noted otherwise, graphics include all countries with a population of at least 50,000 people.

The world’s demographics have already been transformed. Europe is shrinking. China is shrinking, with India, a much younger country, overtaking it this year as the world’s most populous nation.

But what we’ve seen so far is just the beginning.

The projections are reliable, and stark: By 2050, people age 65 and older will make up nearly 40 percent of the population in some parts of East Asia and Europe. That’s almost twice the share of older adults in Florida, America’s retirement capital. Extraordinary numbers of retirees will be dependent on a shrinking number of working-age people to support them.

In all of recorded history, no country has ever been as old as these nations are expected to get.

As a result, experts predict, things many wealthier countries take for granted — like pensions, retirement ages and strict immigration policies — will need overhauls to be sustainable. And today’s wealthier countries will almost inevitably make up a smaller share of global G.D.P., economists say.

This is a sea change for Europe, the United States, China and other top economies, which have had some of the most working-age people in the world, adjusted for their populations. Their large work forces have helped to drive their economic growth.

Those countries are already aging off the list. Soon, the best-balanced work forces will mostly be in South and Southeast Asia, Africa and the Middle East, according to U.N. projections. The shift could reshape economic growth and geopolitical power balances, experts say.

Comment by Riaz Haq on August 10, 2023 at 7:34pm

Aging populations will shake up the global economy by 2050



https://www.marketplace.org/2023/08/10/by-2050-demographic-shifts-c...

Earlier this year, the United Nations put out new data showing that China, which has been the most populous country in the world for at least the last 70 years, has been overtaken by India in population size.

And, based on population projections for the next few decades, that’s far from the only big demographic shift we’ll be seeing in the near future.

Lauren Leatherby is a visual journalist with the New York Times who has been looking into what those demographic shifts will mean for economies around the world. She joined Marketplace’s Kai Ryssdal to talk about how the world will shift by 2050. An edited transcript of their conversation is below.

Kai Ryssdal: On paper, or, as it were, on the internet, this is great story because the graphics are kind of amazing. And they really illustrate it. It’s a little trickier to do on the radio, but that’s fine. That’s kind of my job. I do wonder, though, how you got interested in this story.

Lauren Leatherby: The richest most powerful countries today have long had these really large working-age populations. And economists agree that that’s been a huge, huge advantage economically and geopolitically. And meanwhile, a lot of developing nations have had quite high dependency ratios having a high number of children compared to working-age people. And so, I think we know a lot of these storylines one by one, but putting it all together, it’s just like the world is going to shift really dramatically.



Ryssdal: The example that comes up pretty early in this piece is, of course, Japan, which has already started to make that shift from having a good, robust, working-years workforce to a much older population with far fewer workers.

Leatherby: Absolutely. And then I think what we see in Japan today is only the tip of the iceberg. A lot of East Asia, China, Europe, South Korea will be much older than Japan is today, in just you know, 20 or 30 years. Some countries will have upwards of 40% of their population that are 65 or older in just two or three decades. And meanwhile, on the other end, you have a lot of these other countries that have long been, you know, hindered economically by their age structures. And suddenly a lot of them will start to enjoy the exact same age structures that Europe and East Asia, the U.S., that a lot of those countries have historically enjoyed.

Ryssdal: Right. So what happens in a population, what happens in a country, when that shift happens when that prime-age workforce is big enough to support all the retirees? What does it let that country do? What is the opportunity?

Leatherby: The upside can be absolutely enormous. Some of the best research is that a third of the economic growth in East Asia at the end of the last century is because of this concept of a demographic dividend. But what the experts who I spoke to were very cautious to say is that it’s not automatic.



Ryssdal: It’s not automatic, but we’ve been told, and I say this every now and then, that demographics is destiny. And yet, actually, maybe it’s not.

Leatherby: Yeah, because it can go multiple ways. I mean, if you have the policies in place with education, with good jobs, then that can be a tremendous upside. But I think the perilous thing that we worry about is extremism. I mean, what studies have shown is that [for] a lot of people that turn to extremism, it’s not because of religious ideology, it’s because it’s a better job opportunity. It’s economics. And so it’s just going to be really critical that these places that have suddenly a huge number of, like, healthy 21-year-olds, that they have jobs and education for those people.

Comment by Riaz Haq on August 10, 2023 at 7:34pm

#Arab Gulf Nations (#SaudiArabia, #Qatar, #UAE) Poised to Invest Billions in #Pakistan.
#Islamabad’s powerful #military has sought to ease the path for oil-rich monarchies to acquire stakes in #mining (#copper, #gold) & #energy (#refinery) https://www.wsj.com/articles/gulf-nations-poised-to-invest-billions... via @WSJ

The Saudis are in talks to buy into a copper mine being developed at a cost of $7 billion by Canada’s Barrick Gold in western Pakistan, according to people familiar with the project. Separately, negotiations are at an advanced stage to set up a Saudi oil refinery in Pakistan, which could cost up to $14 billion, according to Islamabad and Gulf officials.

For the Gulf states, the deals represent a shift from when they provided loans or grants to poorer countries in the region, such as Pakistan or Egypt, to a new focus on acquiring assets for their sovereign-wealth funds.

Pakistan, a nuclear-armed nation of 240 million, has been racked by an economic crisis and political instability. It reached an agreement with the International Monetary Fund in June on another bailout.

Its powerful military, which has clamped down on political freedoms in recent months, is seeking to ease the path for investment by streamlining the deal-making process for Gulf investors, who had complained about red tape and political indecision in the past.

Mining, energy infrastructure, farmland and privatizations of Pakistani government businesses could all be part of the planned selloff to Saudi Arabia, the United Arab Emirates and Qatar, which are increasingly competing for assets in struggling political allies.

This summer, Islamabad established the Special Investment Facilitation Council, which includes the army chief, to smooth the bureaucratic path for Gulf investment.

“Pakistan is strategically located, at the junction of the engines of growth in Asia, between south Asia, central Asia, China and the Middle East,” said Ahsan Iqbal, Pakistan’s departing planning minister, who also heads the executive committee of the Special Investment Facilitation Council. “There is a very big opportunity for investors to come here, as long as we can give them assurance that there will be continuity of policy for their investment.”

The Saudi deputy mining and foreign ministers visited Islamabad this month for talks about the investment initiative.

Pakistan Prime Minister Shehbaz Sharif said Wednesday that Parliament would dissolve, ahead of elections that are likely to be delayed into next year. The installment of a nonpolitical caretaker government in Islamabad in the next few days, to oversee the period up to the next election, is expected to kick-start the deals. New powers have been given to the caretaker administration, which will likely be under even greater influence of the military, to enable it to make major economic decisions.

The army is Pakistan’s dominant institution, a permanent power in a country where no prime minister has completed a term in office. The Gulf has long dealt directly with Pakistan’s army, the sixth largest in the world, which has provided a contingent of troops to Saudi Arabia for decades. The first overseas trip for Pakistan’s current army chief, Gen. Asim Munir, was to Saudi Arabia, where he met Crown Prince Mohammed bin Salman in January.

A splurge in Pakistan is expected to come from government-owned entities in the Gulf, which in recent years have invested in Egypt, a country also in the midst of an asset sale, as well as Sudan, Ethiopia and elsewhere in the Horn of Africa.

“For the Gulf, Pakistan and Egypt are a regional security priority,” said Karen E. Young, a researcher at Columbia University’s Center on Global Energy Policy. “They absolutely cannot afford to see a failed state in Egypt or Pakistan.”

Comment by Riaz Haq on August 10, 2023 at 7:35pm

#Arab Gulf Nations (#SaudiArabia, #Qatar, #UAE) Poised to Invest Billions in #Pakistan.
#Islamabad’s powerful #military has sought to ease the path for oil-rich monarchies to acquire stakes in #mining (#copper, #gold) & #energy (#refinery) https://www.wsj.com/articles/gulf-nations-poised-to-invest-billions... via @WSJ

Egypt and Pakistan offer big populations, large tracts of arable land and huge armies, all attributes lacking in the Gulf, said Faisal Aftab, founder of Pakistan-based Zayn Venture Capital.

“This is a last chance for Pakistan,” said Aftab. “It needs to leverage in investment.”

Iqbal, the planning minister, said Pakistan was hoping for deals worth around $25 billion, including in solar energy and information technology. Pakistan’s defense industries are also open for investment, and the country is prepared to offer uncultivated government land on long leases for agriculture.

The Gulf nations haven’t put figures in recent weeks on how much they might spend. In January this year, the Saudis said they were willing to invest $10 billion, after Pakistan’s army chief visited.

Economic crises in Egypt and Pakistan, which have been buffeted by higher fuel and food prices from the Russia-Ukraine war and seen their currencies plummet, mean that assets are potentially available on the cheap. But Riyadh has still balked at prices in Egypt, meaning fewer deals than anticipated have materialized so far. Pakistan will also have to manage competition between Gulf nations for assets, already being felt, especially between Saudi Arabia and U.A.E., which have strained relations.

Among the first contracts likely to attract interest, from both U.A.E. and Qatar, is a tender announced this week, by open bidding, to run terminal services at Islamabad airport. The two Gulf countries fiercely competed for the contract to run Kabul airport in Pakistan’s neighbor Afghanistan, a contest won last year by the U.A.E. Islamabad is also looking for investors to take on its national carrier, Pakistan International Airlines.

Musadik Malik, Pakistan’s departing petroleum minister, said that a deal for a Saudi refinery was “very close.” Saudi Aramco, the company named by Pakistani officials as its partner for the project, declined to comment. The refinery would likely be located at Gwadar, the port developed by China on the Arabian Sea, and the centerpiece of Beijing’s investment program in ally Pakistan. Riyadh is moving closer to Beijing, at the expense of its relationship with Washington.

Officials from both sides are aiming for a final deal on the refinery—which would be the country’s biggest—by the end of this year, with construction to begin early in 2024.

Malik said that he anticipated a series of mining deals that would be much bigger in value than the refinery contract.

“We have enormous untapped resources just sitting there,” he said.

The obvious prize is copper, a metal needed in the transition to cleaner energy. One of the world’s biggest new copper mines is expected to begin production in 2028. The Reko Diq mine is a joint venture between Barrick Gold and the government of Pakistan, in a remote part of the country hit by two violent insurgencies.

Talks are under way for the Saudis to buy into the Reko Diq mine. The Saudi sovereign-wealth fund, Public Investment Fund, would team up with Saudi mining company Ma’aden, to acquire part of the 50% stake in the mine owned by Pakistan, according to people involved. In addition, the Saudis could be given exploration rights in other parts of the copper-rich area.

Comment by Riaz Haq on August 10, 2023 at 7:35pm

#Arab Gulf Nations (#SaudiArabia, #Qatar, #UAE) Poised to Invest Billions in #Pakistan.
#Islamabad’s powerful #military has sought to ease the path for oil-rich monarchies to acquire stakes in #mining (#copper, #gold) & #energy (#refinery) https://www.wsj.com/articles/gulf-nations-poised-to-invest-billions... via @WSJ

Riyadh has ambitions to turn Ma’aden into a global company, but it is wary of the security risks at the Pakistani mine. In July, Saudi Arabia said it would buy a $2.5 billion stake in Brazilian mining company Vale, also through the same fund and Ma’aden.

For Islamabad, there are strategic advantages to tying Saudi Arabia in, while Barrick has joined with Saudi Arabia elsewhere too. Barrick and Ma’aden didn’t respond to requests for comment. The Public Investment Fund declined to comment.

The Saudis are the most interested in the mining opportunities, say officials and experts, while the U.A.E. is looking most keenly at agriculture, clean energy and logistics.

Just ahead of the launch of the Gulf initiative, the U.A.E. swooped in early, acquiring a 50-year lease in June to operate part of the container terminal at Karachi port. The financial terms weren’t disclosed for the deal, which was awarded without an open bidding process. Many coming transactions are also not expected to involve competitive bidding, Pakistani officials say. That approach could open the divestments up to domestic controversy.

Comment by Riaz Haq on August 12, 2023 at 6:43pm

Pakistan expects Middle Eastern investment following inaugural food and agriculture exhibition


https://www.arabnews.com/node/2353116/pakistan


A top Pakistani official expressed confidence on Thursday the country would get increased investment from the Middle East after inaugurating the first International Food and Agriculture Exhibition in Karachi to display the export potential of Pakistan’s agriculture sector.

Organized by the Trade Development Authority of Pakistan (TDAP), the three-day exhibition was launched by the governor of Sindh province, Kamran Tessori, at the Karachi Expo Center. The event has brought together over 200 exhibitors who have put a wide range of agriproducts and technologies on show for foreign delegates from 55 countries.

Addressing the media after the inauguration ceremony, Tessori mentioned a recent agreement signed by the United Arab Emirates (UAE) to develop the Karachi port.

“You will see in the coming days that all the gulf states will come to Pakistan and sign agreements like the UAE,” Tessori said, adding: “In the future, these agreements will be signed by governments themselves.”

UAE’s Abu Dhabi Ports signed a 50-year concession agreement with the Karachi Port Trust earlier this year to develop a bulk and general cargo terminal in the southern port city.

According to details, Pakistan is likely to see an estimated investment of $220 million over a period of 10 years under the project.

The governor said the country’s leadership had become serious about economic development for the first time in its history.

“For the first time in 75 years, the development of Pakistan’s economy has been taken seriously and there will not be any obstruction in the way,” he said.

He maintained that he was confident the country’s exports would increase at least three times by the coming year.

Tessori said over 600 foreign delegates were attending the exhibition which reflected that investor confidence had been restored in Pakistan.

Speaking to Arab News, Sayed Mohey, a commercial manager at Jeddah-based Jahaf Group that deals with fruits and vegetables, said he was impressed by Pakistan’s export potential.

“This is my first visit to the county,” he said. “As far as the business is concerned, there is lot of potential for food stuff like fruits, vegetables, and fisheries.”

He maintained that Pakistan was ideally placed to serve the markets in gulf countries and Saudi Arabia. Mohey specifically mentioned Pakistani mangoes and citrus fruits, calling them the best in the world and saying they were suitable for consumers in the Middle East.

A Nigerian delegation also said they were visiting Pakistan while looking for the good quality food products.

“Most of the Nigerian delegates who are here today actually saw what they want and they are buying it and taking it home,” Unegbu Alexander Nwachukwu, trade and development officer at the High Commission of Pakistan in Nigeria, told Arab News.

A large number of Chinese were also present at the exhibition and looking for products either to import or export from Pakistan.

Alan Xi, an agriculture project manager at the China Machinery Engineering Corporation, said Pakistan’s agriculture sector had great potential and his company was ready to invest in the country.

“Pakistan is an agricultural country and has a big potential in the supply chain and even value-added parts,” he told Arab News. “So, as a company, we are also ready for investing in the supply chain and value addition.”

“In the future, we will not only want to supply some advanced technology to Pakistan but also like to have our own manufacturers [here],” he continued. “The manufacturer unit is from China, but made in Pakistan.”

Pakistani exporter also expressed optimism the event would help boost the country’s agriculture product exports from the country.

Comment by Riaz Haq on August 12, 2023 at 8:44pm

Domino effect: India rice export ban puts market on edge for copycat curbs


https://www.reuters.com/markets/commodities/domino-effect-india-ric...

India's rice export ban leaves 10 mln T of world supply gap
Rival rice suppliers could raise exports by 3 mln T
Other producers may limit exports as local prices rally
Tighter global supplies to heighten food inflation worries

------------


This time, rice exporters will be unable to increase exports by more than 3 million metric tonnes a year as they try to fulfil local demand amid limited surplus, three dealers with global trade houses told Reuters.

Thailand, Vietnam and Pakistan, the world's second, third and fourth biggest exporters, respectively, have said they are keen to boost sales since demand for their crops has been rising after India's ban.

Both Thailand and Vietnam emphasised that they will ensure their domestic consumers are not hurt by rising exports.

"It's unacceptable for a rice-exporting country to face tight supplies and high domestic prices," Vietnam Minister of Industry and Trade Nguyen Hong Dien said last week.

Pakistan, recovering from last year's devastating floods, could export 4.5 million to 5.0 million tons from the current year's 3.6 million tons, according to an official with the Rice Exporters Association of Pakistan (REAP).

But the country is unlikely to allow unrestricted exports amid double-digit inflation, the official said.

The leading importers of non-basmati rice include the Philippines, China, Senegal, Nigeria, South Africa, Malaysia, Cote d'Ivoire, and Bangladesh.

CHAIN REACTION
Global prices have risen by around 20% since India's ban. A further 15% gain could trigger restrictions by Thailand and Vietnam, according to traders at international trading companies.

"The question is not whether they will limit exports, but rather how much they will restrict and when they will take such measures," said a New Delhi-based trader.

This week, rice prices in Thailand and Vietnam soared to 15-year highs as buyers rushed to cover shipments to compensate for the decline in India's exports.

Comment by Riaz Haq on August 16, 2023 at 10:14am

Chinese red chilli contract farming opens vistas for development in Pakistan’s agri sector | Pakistan Today


https://www.pakistantoday.com.pk/2023/07/05/chinese-red-chilli-cont...

“We turn them three to four times a day so that they get dry after being soaked in the summer sun, they get fully ripe and dry in five weeks, and when we hear the sound of dried seeds rattling inside the pod, we pack them in bags and put them in storage, Bibi told Xinhuain the remote village of Jamber.

This year, farmers and labourers are happy to get a bumper harvest of Chinese red chillies and expect to get good profits as the yield is double that of other varieties of pepper available in Pakistan.

The project is a part of a large-scale agricultural cooperation between Pakistan and China in the second phase of the China-Pakistan Economic Corridor (CPEC), which is currently underway after the success of the first phase focusing on infrastructure and power projects.

Launched in 2013, CPEC is a corridor linking Gwadar Port with Kashgar in northwest China’s Xinjiang Uygur Autonomous Region and is touted as a game changer for Pakistan by local experts.

Advancing cooperation in the agricultural sector, China Machinery Engineering Corporation (CMEC) and Sichuan Litong Food Group have established a company and carried out a red chilli contract farming project in 2021, with model farms across Punjab.

In talks with Xinhua, Xi Jianlong, the Chinese manager from CMEC at Pakistan-China red chilli contract farming, said that the Chinese variety is compatible with local soil and the overall hot climate of Punjab province conduces to the growth and nourishing of the Chinese chilli variety.

He added that the cooperation benefits numerous individuals, including landowners, farmers, and labourers.

“Last year, we had created more than 2,000 jobs in Pakistan and generated an output value of approximately $770,000,” he said, adding that when the crop is harvested and dried, they directly buy it from the farmer, without involving any middlemen.

He further said that this year, they planted chilli on about 750 acres of land from where about 1,500 tons of chilli were harvested, and during the process of cultivation to harvest, the Chinese company not only transferred knowledge and technology to locals but also utilized the rural labour force.

Talking to Xinhua, Muhammad Ammar Asghar, an agronomist working with the CMEC, said that most of the farmers hired by the landowners are uneducated. In order to help the landowner get a high yield, the Chinese company provided complete assistance and guidance to the farmers through agronomists and agriculture technicians.

Comment by Riaz Haq on August 17, 2023 at 9:36am

How India’s ban on some rice exports is ricocheting around the world
India’s decision to ban exports of some rice was based on domestic reasons, but it’s had a global impact.


https://www.aljazeera.com/economy/2023/8/16/how-indias-ban-on-some-...

Last month, three days after Russia pulled out of the Black Sea grain deal, India imposed a ban on July 20 on the export of non-basmati white rice. The move followed a ban on the export of broken rice, which was announced in September last year and is still in place.

India’s reasons were domestic — rising food prices, high inflation and fear of rice shortage due to El Nino disruptions as the country heads into a festive season and elections — but the bans’ impact is now being felt globally, with prices shooting up.

“Earlier rice was trading for $550 per metric tonne, now prices are hovering above $650,” Nitin Gupta, senior vice president of Olam Agri India Private Limited, one of India’s biggest rice exporters, told Al Jazeera.

Here’s an explainer on India’s role in the global rice market and how elections, climate change and El Nino are complicating rice prices.

India, the world’s biggest rice exporter, accounted for nearly 40 percent of global rice trade in 2022, exporting 22 million tonnes worth $9.66bn to 140 countries. That included 4.5 million tonnes of basmati rice, 8 million tonnes parboiled rice, 6 million tonnes non-basmati white rice, and 3.5 million tonnes broken rice.

India continues to export parboiled and basmati rice, meeting its international commitments halfway, but global rice prices have increased by 15-25 percent since the ban. Worst hit are the poor in countries like Bangladesh and Nepal, who depend on Indian white rice, and those in African countries like Benin, Senegal, Togo, and Mali, which import broken rice — the cheapest and most filling variety.

International prices for grains had already shot up due to Russia’s war on Ukraine. Prices have further rallied since Russia walked out of the Black Sea Grain Initiative, which would have allowed grain from Ukraine to reach world markets.

And now, in addition to India’s rice ban is the fear that Thailand, Vietnam and Pakistan – which together account for 30 percent of global rice sales – may do similar copycat bans in case their crops are hurt by El Nino, which has returned for the first time in seven years.

Traders and scientists say a shortage of rice, a staple for more than half of the world’s population, will have a spillover impact on wheat, soya beans, corn and maize, which are used as rice substitutes both for human consumption and in animal feed. This could lead to a domino effect on the demand and prices of not just other food items, but also fuel.

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