Prices of essential foods like wheat and sugar have risen astronomically in Pakistan since Prime Minister Imran Khan took office in August 2018, a further sign of a growing problem for the nation’s struggling working-class.
There was a price increase of 18% in the third quarter of this year, with food prices surging nearly 13% in just August. Crops in several areas have been destroyed by heavy rains and severe pest attacks, including locust invasions, which have contributed to the rising inflation. The prices of essential food items have increased significantly since August 2018. The Minister for Planning, Development and Special Initiatives, Asad Umar, stated that the price of sugar stood at PKR 55.84 per kg in August 2018, and by the end of September 2020, it had risen to PKR 96.62 per kg, with the price of wheat flour having increased 53% during that time.
At a news conference held last month on 15 October, Foreign Minister Shah Mehmood Qureshi, Minister for National Food Security and Research Fakhar Imam, and Minister for Industries and Production Hammad Azhar, acknowledged the drastic increase in food prices and affirmed their support for the nation’s people.
“We are cognisant that (the people) have faced difficulties. The prices of sugar and flour have increased, which should not have been increased, but they did. The government is not ignorant,” said Mr. Qureshi. He also resolved to fix this issue: “(The federal government) will take all required fiscal, financial or administrative measures to stabilise the prices,” he stated. These statements echo the PTI government’s frequent remarks promising to fix the inflated prices, with the PM having repeatedly vowed, since last year’s wheat and sugar crises, that the government would bring prices down.
The news conference was held on the same day as thousands of government employees from various departments all over the country staged a sit-in in front of the Parliament House in Islamabad to protest against the price hikes and demand salary increases to deal with the rising inflation.
The government plans to significantly increase wheat and sugar imports in the coming months to curb the rising prices, intending to buy up to 2.6 million tons of wheat and 300,000 tons of sugar, according to Mr. Imam and reported by Bloomberg at the start of October 2020. The country has reportedly booked 18 vessels to import about 1.09 million tons of wheat by January 2021 and issued international tenders to purchase 150,000 tons of sugar. Wheat and cotton production fell short of the government’s targets last year after farmers faced adverse weather conditions and devastating pest attacks, Mr. Imam said. The same issues persisted this year. He said there were plans to increase wheat production to 28 million tons in the next season. The crop will reportedly be grown over 22 million acres of land.
The government has also blamed wheat and sugar mill cartels for the price hike, accusing them of anti-competitive practises. Mr. Imam had claimed that the international price parity of wheat compared to the local market spiked the prices and created a room for third parties like cartels to hoard and profiteer. He said a mechanism in collaboration with provincial governments would be evolved to check undue price hikes and bring down cartels and hoarders.
However, this contrasts with some other key findings earlier this year which linked Imran Khan’s government to the price hike. A government report, ran by the Financial Times in April 2020 and issued by the Federal Investigation Agency (FIA), said that FIA investigators had found certain influential figures in PTI to be behind the sugar price rise. Jahangir Khan Tareen, PTI’s former secretary-general, and Khusro Bakhtiar, then-Minister for Food Security and current Minister for Economic Affairs, were reportedly among the main beneficiaries of the sugar price hikes.
“The exporters of sugar benefitted in two ways: first, they were able to gain subsidy and, secondly, they profited from the increasing sugar prices in the local market,” the report said. A separate preliminary wheat report said the crisis was the result of a “saga of failures at the policy and planning level” and blamed provincial officials.
The damning reports forced Mr. Khan to confront the thorn in the side of his anti-corruption election campaign, largely credited for spearheading his victory in the 2018 elections. Mr. Khan’s government has faced frequent criticism for failing to deliver on his campaign promises.