https://arab.news/8vrs3
- Devastating floods in Pakistan’s breadbasket Punjab have killed 46 since late August, affected over 3.9 million
- Financial expert urges government to allow imports of up to 6 million tons of wheat to stabilize surging prices
KARACHI: Floods in Pakistan’s eastern Punjab province have destroyed 30 percent of the country’s wheat stocks, a senior official of a leading business forum said this week, as a prominent trader advised the government to allow imports of the commodity to stabilize prices.
Large swathes of crops have been destroyed in Pakistan’s Punjab since late August, where floods have killed 46, affected 3.9 million and displaced 1.8 million. Deluges have damaged fields of rice, maize, cotton, sugarcane, vegetables and damaged wheat storages in the breadbasket province, triggering fears of shortages and increase in food prices.
Pakistan was ranked as the world’s eighth-largest wheat producer by the US Department of Agriculture (USDA) last year. It said the country had produced 31.4 million tons of the crop that year, which amounted to 4 percent of the world’s total wheat production.
“Our assessment (is that) 30 percent of wheat stock is gone,” the Pakistan Business Forum’s (PBF) Chief Organizer Ahmad Jawad told Arab News on Thursday.
The PBF is a prominent organization that represents and supports the business community of Pakistan. It is a part of the International Business Forum (IBF), a platform comprising 42 business associations from nearly 25 countries.
Shah Faisal, a public relations officer at Pakistan’s food ministry and Waqas Alam, general manager field wing at the Pakistan Agriculture Storage & Services Corporation (PASSCO), did not respond to Arab News’ queries about the position of the country’s wheat stocks.
Agriculture contributes 24 percent to Pakistan’s gross domestic product, according to the Pakistan Bureau of Statistics. The USDA has estimated Pakistan’s wheat production this year at 28.9 million tons from 9.1 million hectares till August, 8 percent down from last year’s 31.4 million tons.
The shortfall is expected to adversely impact the food supply situation in Pakistan. According to the PBF, Pakistan consumes 33.6 million tons of wheat annually.
“Floods have severely affected wheat stocks in central and south Punjab,” Jawad said, wondering how Pakistan’s wheat stocks could remain stable when the government still lacked proper storage depots.
SUPPLY GAPS
Muzzammil R. Chappal, chairman of the Cereal Association of Pakistan (CAP) and a trader, said Pakistan was short of as much as three million tons of wheat, which has pushed its prices to a three-year high in the last 15 days.
The price of 100 kilograms of a bag of wheat in Pakistan’s major cities like Karachi, Quetta and Peshawar has surged by about 40 percent to Rs9,000 ($32).
“This perhaps can increase to Rs15,000 ($53) if the government still did not devise an import policy,” Chappal warned.
The CAP chairman and private trader said he had written to the food ministry on Aug. 27, seeking permission to import 500,000 tons of wheat per month to stabilize prices.
Chappal attributed the current shortage to some farmers whom he said had fed at least 2.5 million tons of wheat to their poultry and animals. He said this had happened when wheat was being sold for Rs5,500 ($20) per 100 kilograms.
“(Wheat) was substituted for maize, about 30 percent of which had been damaged by monsoon rains,” he said, adding that heavy rains, snowfall and floods damaged the crop.
In his letter, Chappal told the food ministry that the recent “sharp increase” in wheat prices reflected concerns of a potential shortage.
Pakistan has been importing wheat for the last five years, except in 2024, when the harvest was approximately 3.5 million tons higher than the five-year average of around 28 million tons, he said.
For this year, production estimates stood at 27.5 to 28 million tons amid the consistent rise in consumption.
“If timely corrective steps are not taken, this could lead to supply gaps or even a shortage situation toward the end of the season,” the private grain trader warned.
He requested the government to consider allowing wheat imports “at the earliest to ensure food security and market stability.”
Kamal Ahmed, a commodities analyst at brokerage house AKD securities, said the impact of floods would be more visible on rice and sugarcane, adding that Pakistan’s wheat stocks had largely remained safe.
“Currently, PASSCO holds about 4.2 million tons of wheat in its storage,” Ahmed said. “These facilities are specifically designed with flood risks in mind, ensuring that water intrusion is minimized.”
Arif Habib Commodities Chief Executive Officer Ahsan Mehanti, however, backed Jawad’s assessment that 30 percent of wheat had been lost to the floods. He said the deepening wheat shortfall may increase Pakistan’s import bill significantly this year.
“The country is going to face a production loss of at least $3 billion,” Mehanti said. “To keep prices stable, the government will be required to import as much as six million tons of wheat.”