Pakistan facing highest Food Inflation in the history as consumer price inflation of food items in Pakistan jumped to a record 47.15% in March from a year earlier, according to the Statistics Bureau of Pakistan.
The March inflation number surpassed February’s 45.1%, the bureau said, as food, beverage and transport prices raised up to 50% in one month.
The consumer price inflation for food items in Pakistan was 47.51 per cent in March 2023 was the highest in South Asia after Sri Lanka with 54.4 per cent, according the World Bank.
The domestic grain and wheat flour prices remain volatile in the beginning of 2023 and further going up in March and April 2023, World Bank’s report “Food Security Update” said.
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It was also added that the prices of various food items including wheat was well above its year-earlier levels. According to an estimation, the wheat prices in March 2023 reached record highs and were 20 to 140 percent higher that the previous year.
1. World Reports of Food Inflation
In an other report by the UN’s Food and Agriculture Organization (FAO), it was revealed that various reason of recent price hikes in Pakistan. A few of these are low production since 2018, regular stock losses, high agricultural input, record-high transportation costs, high headline inflation, and the limited trade flows due to the 2022 floods.
As compared to Pakistan’s 19.94%, in March 2023, year-on-year consumer price inflation for food prices was 5.14% in India, 9.5% in Bangladesh, and 7.68% in Nepal.
The report also highlighted that that rice production in 2022 was reduced in a few countries like Pakistan and Tanzania, while rice production was increased in several countries, including India.
Due to decreased rice exports from Pakistan, the US Department of Agriculture predicts a 4.5% contraction in rice shipments. It was also added that overall domestic food price inflation remains high around the world.
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The report also added that the, from October 2022 to March 2023, the food price inflation has effected almost all low-income and middle-income countries.
Furthermore, around 87% of high-income countries are experiencing high food price inflation. Food price inflation has affected majority of the countries in Africa, South Asia, North America, Latin America, Central Asia, and Europe.
2. Inflation in South Asia
All countries in the South Asia except Bhutan are facing hike in inflation. Sri Lanka and Pakistan are two counties that that have been seriously affected by the recent wave of inflation. Bangladesh and Nepal are slightly affected. While, India, Maldives and Bhutan are stable.
| Characteristic | 2017 | 2018 | 2019 | 2020 | 2021 | 2022* | 2023* |
| Sri Lanka | 6.58% | 4.27% | 4.30% | 4.56% | 5.96% | 48.19% | 29.47% |
| Pakistan | 4.15% | 3.93% | 6.74% | 10.74% | 8.90% | 12.15% | 19.94% |
| Bangladesh | 5.44% | 5.78% | 5.48% | 5.65% | 5.56% | 6.15% | 9.05% |
| Nepal | 4.45% | 4.15% | 4.64% | 6.15% | 3.60% | 6.26% | 7.68% |
| Bhutan | 4.31% | 3.66% | 2.82% | 3.04% | 12.62% | 7.66% | 6.56% |
| India | 3.60% | 3.43% | 4.76% | 6.18% | 5.51% | 6.89% | 5.14% |
| Maldives | 2.27% | 1.37% | 1.33% | -1.59% | 0.21% | 4.27% | 4.36% |
It has been predicted that inflation in South Asia is set to fall to 8.9 percent this year, and to below 7 percent in 2024. According to experts, the delay in inflation decline is due to weaker currencies and delayed domestic price adjustments.
The food insecurity is seriously hitting countries in South Asia, especially the poor countries that spend a major share of their income on food.
3. Why food prices are high in Pakistan?
The experts have added that the persistently high rates of food items are result of domestic food shortage. In countries like Pakistan, the food prices are soured sue to devastating floods in 2022. The rupee depreciation is another major factor of recent inflation hike.
In addition to above, a few other key reasons are government’s policies and restriction on imports has delayed imports , disrupted the domestic supplies. Pakistan facing highest Food Inflation in the History and Pakistan need to plan come out of this dig.
The underlying causes of price increases are stagnant and fluctuating agriculture productivity, inefficient use of key natural resources particularly water, and limited innovation, as well as weather-related shocks.
4. What is the Solution
The countries like Pakistan need to take serious measures to deal with the food shortage and souring inflation rates in the country. Pakistan facing highest Food Inflation in the History and here a few of the possible measures can be:
- To adopt modern agriculture methods, techniques and tools to increase wheat production
- To adopt better, efficient and improved mechanism of food storage
- To increase competition in the sugar sector
- To reform and improve the wheat procurement system
- To take serious measures to counter global warming
- To focus on high-value and climate-smart agriculture
- To improve mechanism and systems of monitoring, and forecasting
