June 02, 2008	Monday	Jamadi-ul-Awwal 27, 1429

WASHINGTON, June 1: Wheat production is forecast to decline slightly in Pakistan this year, because of dry conditions in some areas and a reduced use of inputs, but may nevertheless remain slightly above the average of the past five years, says the World Food Outlook for June 2008.

The report, prepared by the Food and Agriculture Organisation of the United Nations, also presents a more favourable outlook for India, where the harvest is already under way. In India, this year’s crop could turn out to be a record, close to 77 million tonnes.

But, World Bank experts told Dawn, this would not end the smuggling of wheat from Pakistan to India. They noted that wheat is still heavily subsidised for urban consumers in Pakistan, selling at least 30 per cent less than the market prices in India.

Similarly, smuggling to Afghanistan will also continue despite Pakistan’s efforts to regularise wheat imports to the neighbouring country.

Recently, Pakistan sanctioned the export of 50,000 tons of wheat to Afghanistan to help ease an acute food crisis in that country. The 50,000 tons of wheat would be in addition to 600,000 regular annual exports to Afghanistan.

Although Pakistan is not as badly affected by the current food crisis as some other countries in South Asia, such as Bangladesh, experts warn that the poor in Pakistan may be more vulnerable than those in neighbouring countries because the country does not have a widespread social assistance programme for the poor.

A recent FAO report notes that most Pakistani families consume the same kind of wheat, making it difficult to target poor people. Any subsidy on wheat will thus be an untargeted subsidy.

Pakistan is not among the 22 countries that are considered the most vulnerable to a food shortage. But the FAO placed Pakistan among the 37 countries where the food crisis looms.

Despite favourable prospects for this year’s wheat crops in several major producing countries, Asia’s total output could slip back a little from last year’s record level, because of dry conditions affecting some Asian countries.

The most significant producing countries affected are the Islamic Republic of Iran, where output may fall by some 2 million tonnes from last year’s record to 13 million tonnes, and Kazakhstan, where a significant reduction to about 14 million tonnes is expected after last year’s excellent crop.

In China, despite drought in some eastern parts, increased plantings and higher yield expectations in areas not afflicted by dry conditions point to another slight increase this year, reaffirming the country’s upward trend in wheat production.

With many of the world’s major wheat crops already being harvested or nearing harvest in the northern hemisphere, firmer indications of more plentiful wheat supplies in the new season have driven international wheat export prices down sharply in recent weeks.

The price of US wheat averaged $349 per tonne in May, 27 per cent down from the record highs in March but still 72 per cent above the May average last year. In futures markets, prices have also decreased sharply in recent weeks.