Daily Times

Flour prices hitting their highest level in the nation’s history is bound to make costs of living increasingly unmanageable for the millions.

Wheat prices have been rising incrementally since August. In the last week alone, Karachi, Hyderabad and Quetta have witnessed a surge of Rs 100, increasing the total price of a 20 kg bag of flour to over Rs 2500. Currently, prices in Islamabad and Punjab are a bit more bearable but not for long. The increase correlates to a broader atmosphere of food insecurity in the global market and it is estimated that the increase in food prices over the last decade could very well push 100 million people in lower-income countries deeper into poverty, especially those who reside in urban areas. The shocks to global grain production catalyzed by a war between the world’s two largest grain producers, Russia and Ukraine, are partly to blame. But most of the responsibility lies with profiteering grain-trading agribusinesses who have raised their prices without being questioned. Financial speculation in wheat futures markets has also generated a spike in prices.

In Pakistan, wheat prices are set by the Ministry of Food, Agriculture and Livestock at the beginning of the harvest season, procurement prices often exceed the support price depending on market conditions which have been particularly volatile as of late.

While wheat accounts for only 0.5% of the Consumer Price Index, wheat and wheat products constitute 5.1% of the CPI basket. This year, demand has been uncharacteristically high, especially in flood-hit areas and it appears that the government cannot cope with the pressure.

The federal government continues to contest claims of a wheat shortage despite the country approving a deal to import nearly 300,000 tonnes of wheat from Russia earlier this year. Water scarcity and damaged croplands from the floods have put Pakistan in a precarious position as it struggles to compensate for its slashed harvests. Millions of people in Pakistan are expected to face hunger and starvation this year as basic nutrition has been put out of their reach. It is essential that the government gets its act together and institute stabilizing mechanisms to regulate the price of wheat before the situation gets any worse. *