The week in focus

A sharp rise in food prices in international markets has made production of essential crops important.

A sharp rise in food prices in the international market, reported by the Food and Agriculture Organisation (FAO), has made it all the more important for Pakistan to ensure higher production of essential crops that will not only meet the needs of the country but also provide sufficient surplus for export.

According to FAO, world food prices surged to a new historic peak in January, for the seventh consecutive month, reflected in the FAO Food Price Index, a commodity basket that includes wheat, maize, rice, meat, edible oil, dairy and sugar. FAO said the upward pressure on food prices is not going to abate and high prices are likely to persist in the months to come.

In order to ensure food security, Pakistan needs to cultivate essential crops on a large scale by developing high-yield seeds, adopt mechanised farming and utilise idle land. Though the country’s economy depends mainly on agriculture, it has to go a long way to catch up with technological developments taking place in food-exporting countries like Australia, Brazil and the US.

Farmers Associates Pakistan Director Rabia Sultan from Lahore said diversion of food crops to bio-fuel production is a key factor behind higher food prices. She said sugarcane and corn are mainly used in producing bio-fuel and in Brazil a huge quantity of fuel is produced from sugarcane.

Besides bio-fuel, floods in many countries like Pakistan, India, China, Australia and Brazil have swept away cultivated crops and damaged the soil, with the result that food prices have gone up in the international market.

Sultan said Punjab’s main food crop in the Rabi season is wheat, but water shortage and high fertiliser prices pose a threat to the crop which is in its final stages. Harvesting is expected to start in April and total wheat production of the country is expected to be 23 to 24 million tons.

Sunflower production

Sindh Abadgar Board Information Secretary Nadeem Shah said this year sunflower crop is expected to be cultivated on 1.5 million acres, which will reduce the need for import of palm oil and palm olein costing around $2.3 billion per annum. “If sunflower is sown on 2.5 million acres, it along with oil-producing cottonseed will meet demand for edible oil,” he said.

Shah said wheat crop in Sindh is close to maturity. “Now it needs water supply or rain and the province is expected to produce around 3.2 million tons this season.” He said wheat prices in the international market have shot up to around $330 per ton compared to $240 per ton a month ago, encouraging exports.

Food security

“Major commodities exported by Pakistan are rice, wheat and milk. Wheat exports have good prospects as the government has a surplus of around six million tons from previous crops, of which two million tons can be exported and the remaining can be kept in reserves,” Abdul Shakur, Assistant Vice President BMA Capital Research said.

However, he said milk production has been affected after the floods of last year. Rice exports are expected to be around four million tons compared to production of six million tons this season.

Shakur said production of pulses, potatoes, tomatoes and other perishables should be increased to ensure food security and to help avoid imports. In this regard, the example of India and Sri Lanka cannot be forgotten where onion prices soared to more than Rs100 a kg in the last two months.

the writer is incharge Business desk for the Express tribune and can be contacted at [e-mail]

Published in The Express Tribune, February 14^th, 2011.