Increasing wheat imports along with those of tea, palm oil, spices and sugar caused a whopping jump of 56 per cent in the country’s food import bill in the first quarter of 2020-21. It amounted to $1.71 billion in the three-month period. In 2019-20, the food import bill plunged 4.31pc to $5.42bn.
In September alone, the food import bill stood at $731 million versus $452m in August and $400m in September 2019, thus signalling the revival in food imports despite the government’s efforts to curb foreign buying through various measures.
To control the flour price, wheat imports from Ukraine began in the last week of August with 39,348 tonnes of the commodity costing $9.5m at the price of $242 per tonne.
The per-tonne rate further dropped to $235 in September as the import quantity swelled to 392,246 tonnes valuing $92m. The wheat import bill in the first quarter of 2020-21 stood at $102m as 431,594 tonnes arrived in the country through the private sector.
After pushing up the prices of flour type No. 2.5 to Rs59 per kg and fine/super fine to Rs71 per kg — from Rs43 and Rs46 per kg, respectively, prevailing in March — the millers in Sindh reduced the rate on Oct 22 by Rs7 to Rs52 per kg for No. 2.5 and Rs64 per kg for fine/super fine. The reduction was on account of the falling price of imported and locally produced wheat.
Despite the rupee’s notable recovery against the dollar between July and October, the prices of different pulses rose by Rs20-40 per kg
The federal government had not taken any serious notice of the massive price increase between March and October 22. Instead, it opened wheat imports to lower flour prices.
Wheat from Ukraine now costs Rs5,070 per 100 kg, including transportation charges from the port, as opposed to Rs5,500, the rate that prevailed in the first week of October. The price of locally produced wheat is Rs5,200 per 100 kg as opposed to Rs5,700 in the open market.
Including the one ship loaded with Russian wheat, private importers expect the arrival of 300,000 tonnes in October. Trading Corporation of Pakistan (TCP) has also imported 180,000 tonnes during the current month. The government had fixed the import target of 1.5m tonnes each for TCP and the private sector.
Imports of pulses jumped to 121,622 tonnes in September valuing $55m against 71,326 tonnes costing $35m in the preceding month and 63,745 tonnes a year ago with the import bill of $30m.
Imports of pulses in the first quarter of 2020-21 rose 8.5pc in quantity to 274,299 tonnes and 14pc in value to $135m on an annual basis. The per-tonne price of the commodity stood higher at $493 in July-Sept as opposed to $469 a year ago.
Despite the rupee’s recovery against the dollar by Rs5 between July and Oct 22, the prices of different pulses rose by Rs20-40 per kg.
Karachi Wholesale Grocers Association (KWGA) Patron-in-Chief Anis Majeed said traders had brought higher quantities of yellow peas from Russia and Canada. Imports of daal masoor from Australia and Canada also remained up. He said higher prices of pulses in the international market offset the falling import costs owing to the rising rupee strength against the greenback.
Anticipating higher consumption in winter, importers procured tea in larger quantities. Its import showed a jump of 51pc in quantity to 65,495 tonnes and 39pc in value to $142m during the first quarter 2020-21 on a year-on-year basis. The per-tonne price in the three-month period fell to $2,167 from $2,362 a year ago. However, tea’s retail price remained unchanged.
A tea importer said legal imports have improved amid suspension in tea arrival under the guise of Afghan Transit Trade (ATT). The share of smuggled tea was around 25-30pc in the country’s total consumption. He said many investors took the plunge to benefit from falling tea prices in the world market from March to August as they expected a price recovery when demand would soar in winter.
Palm oil imports in July-September showed a 39pc jump in quantity to 932,530 tonnes and 60pc hike in value to $579m on an annual basis. Amid higher prices in the international market, the per-tonne price in the last quarter went up to $620 from $539 a year back.
A ghee/cooking oil producer said imports of palm oil rose due to the low availability of cotton seed oil in view of a massive drop in cotton production. Cotton seed oil is used in the production of ghee.
He said the food intake by people would also increase during winter. Besides, people have returned to outdoor dining after many months. In view of the rising food consumption in winter, importers and ghee/cooking oil makers have expedited the imports of palm oil. He said rising demand had pushed up the prices of palm oil in the world market.
Imports of spices registered a rise of 46pc in quantity to 45,099 tonnes and 22pc in value to $50m in the first quarter of 2020-21 on an annual basis. The per-tonne price of spices in the world market fell to $1,103 in the last three months from $1,327 one year ago.
An importer of spices, Haroon Agar, said he was surprised by the 46pc hike in the import volume as a number of items are being smuggled. He said prices of spices moved both ways in recent months. For example, the price of black pepper from Vietnam surged to $2,700 per tonne from $2,400 in the last one month. The price of cardamom plunged to $18 per kg from $40 while that of cassia bark (Chinese cinnamon or dar cheeni) stayed unchanged at $800-900 per tonne. The price of clove increased to $4,000 per tonne from $3,600.
The government also allowed the import of 300,000 tonnes of sugar. Cereal Association of Pakistan Chairman Muzammil Chappal said the total imports of sugar from September to Oct 22 were 120,000 tonnes at a price of around Rs88-92 per kg, including 17pc general sales tax.
He said the rupee’s recovery against the dollar might be proving helpful in lowering the cost of imports, but it is hurting exports. One dollar now sells at Rs161-162 as opposed to Rs167-168 on July 1.
Imports of dry fruits and nuts increased to 9,855 tonnes ($15m) in July-September from 2,821 tonnes ($4.4m) a year ago.
Imports of milk cream and milk food products stood at 10,018 tonnes ($41m) in the last three months as opposed to 12,549 tonnes ($30m) in the same period last fiscal year. They were down 20pc in quantity, but up 36pc in value.
Published in Dawn, The Business and Finance Weekly, October 26th, 2020