Pakistan’s ‘atta crisis’ as people fight over wheat

On Friday, the value of the Pakistan Rupee (PKR) plunged further, trading at Rs 266.6 per dollar, after the government let the country’s currency devalue by Rs 24.54, a pre-requisite to revive the stalled IMF loan programme.

The ripples were felt in a day. Just after the currency plunged, the price of wholesale pulses surged in Pakistan, hinting that the days ahead will be excruciating for the nation facing economic collapse as food inflation will, in all certainty, peak.

Over the last month, the country has been witnessing harrowing visuals of people bickering for subsidised wheat. With long queues and people chasing wheat trucks and stampedes resulting in deaths, the situation in Pakistan is dire.

Shockingly, the stampede was caused after people gathered around the vehicle pushing each other to grab the bag of flour from the trucks selling 10-kg flour bags at the rate of Rs 65/kg.

But, the crisis has been stewing for months now. An article that appeared in Dawn last October, just after the floods, had forewarned the ‘atta crisis’ stating that “Pakistan will have to import a larger quantity of the cereal over the next several months” and this was not good news for the country struggling to survive.

Three months since, reports from Pakistan say that wheat costs around PKR 145 per kg to PKR 160 per kg in Punjab and Sindh, the two wheat-producing states. The prices are even higher in Khyber Pakhtunkhwa, Balochistan and Gilgit-Baltistan where protests have erupted seeking wheat. In short, the prices of flour bags in Pakistan have almost doubled from a year ago.

As per World Bank figures, over six million people in Pakistan are currently experiencing food shortages in Pakistan.

But, what caused the crisis? A combination of factors, including bad policy, low yields to high prices of fertilizers. The already dwindling supply was further affected by the Russian-Ukrainian war as Pakistan was importing a huge chunk of its supply ($1.01 billion worth of wheat) from Ukraine and Russia. The war disrupted the supply chain, causing wheat prices to soar.

The mere fact that an agricultural nation like Pakistan has to import wheat – over six million tonnes of wheat in the last three years at the cost of $6 billion — hints at the state’s failure.

“In India, Punjab and Haryana are considered the bread baskets. Going by area alone, we should have had a bread tokra (receptacle). We should not have had to import at all,” Qalb-e-Abbas, a farmer based in Punjab’s Jhang district, told The Indian Express.

The blame for the current crisis cannot be put squarely on the floods, though it washed away a large part of Sindh and south Punjab, wheat-cultivating areas. Farmers also lost a huge stock of seed and the effects will be prolonged as the soil remains unfit for sowing.

Pakistan’s farming sector was still ancient without technological advancements. With no land reforms, procurement policy, high fuel prices and dwindling seed quality, the doom was inevitable.

Besides, the ongoing tiff between the federal government and states, both political, has affected the procurement, so much that Prime Minister Shehbaz Sharif had to issue a strict warning against hoarding. He also urged the provinces to ensure a timely supply of wheat to flour mills from their own and Pakistan Agricultural Storage & Services Corporation reserves.

The smuggling of flour to Afghanistan is also a cause for worry.

The current situation is unlikely to get any better soon. The dwindling foreign reserves, currently a $3.7bn, have affected the imports. As per reports, over 9,000 containers are stuck at the ports waiting to be paid for clearance, including essential commodities including petroleum products, LNG and soybean.

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