PAKISTAN MARKET MONITORING BULLETIN

Transcription

1 PKST MRKET MOTORG BULLET S S U E O 1 6 O C T O B E R This bulletin can b e downloaded from SDE THS SSUE: TERTOL WHET D RCE MRKET STU- TOS (Page 2) FLOODS MPCT O DO- MESTC PRODUCTO D VLBLTY (Page 2) DOMESTC STPLE FOOD PRCES (Page 3) Highlights Without emergency food assistance, floods would have resulted in an additional 5 million people undernourished in Pakistan nternational wheat prices increased sharply from July to September, but are expected to stabilize as supply is sufficient for 2010/2011 Despite anticipated record highs in world rice production in 2010, international rice prices have increased slightly following the monsoon floods in Pakistan Domestic cereal output in 2010/2011 declined by 4.7 million tonnes due to floodrelated crop loss Domestic cereal supply should satisfy national requirements through pril 2011 Lower wheat opening stocks in May 2011 and reduced wheat production may require increased wheat imports in 2011/2012 marketing year Wholesale wheat prices remain extremely high Retail wheat prices remain historically high despite declines between March and ugust 2010 n September, following the floods, wheat retail prices increased by as much as 21 percent in main Punjab markets Consumer purchasing power deteriorating since 2006 Short- lived increase in terms of trade during the floods WGE RTES D CO- SUMER PURCHSE POWER (Page 4) Vulnerability nalysis and Mapping Unit World Food Programme slamabad, Pakistan Ph: HOUSEHOLD FOOD SECURTY D OUTLOOK Without emergency food assistance, floods would have resulted in an additional 5 million people undernourished in Pakistan The 2010 monsoon floods in Pakistan were the worst experienced in a generation; they directly and indirectly affected about 21 million people and damaged or destroyed almost 2 million houses. ccording to the WFP Flood impact assessment, as a result of the floods, 10 million people were in need of immediate food assistance. Without this assistance, the floods would have resulted in an additional 3 percent of the national population or about 5 million people becoming undernourished (consuming less than 2350 Kcal/day). mong the people affected by the floods, the most vulnerable to food insecurity are the small farmers who are highly dependent on crop production as their major income source, while the people most affected by market and economic shocks are daily agriculture labourers whose purchasing power was reduced (see below). s of October 2010, WFP is providing emergency food assistance to over 7.3 million flood-affected people.

2 PGE 2 Scope of recovery food assistance is currently being assessed Medium to longer-term food assistance will be required in flood affected areas to help those who were not able to fully recover their livelihoods after the floods. While initial post-flood estimates indicated that 3.6 million people were in need of recovery food assistance, the scope of assistance required is currently being updated based on the results of the Flood Recovery ssessment conducted by WFP and FO with support from UFEM and OX- FM. Results are expected in December TERTOL WHET D RCE MRKET nternational wheat prices increased sharply from July to September, but are expected to stabilize as supply is sufficient for 2010/2011 Despite anticipated record highs in world rice production in 2010, international rice prices have increased slightly following the monsoon floods in Pakistan Harvesting of rice in the major producing countries in the northern hemisphere has started. FO predicts record high harvests. Rice prices have increased in the aftermath of the floods. This is reflected in the price of Thai white rice B which increased by 6.4% from 466 USD per tonne in July to 496 USD per tonne in September. Price increases reflect both: 1. concerns over the impact of floods in Pakistan, the world third largest international rice exporter in 2009, and 2. increased rice import demand FLOODS MPCT O DOMESTC PRODUCTO D VLBLTY Domestic cereal output in 2010/2011 declined by 4.7 million tonnes due to flood-related crop loss nternational wheat prices have surged since the beginning of July 2010 as a result of the severe drought that afflicted CS 1 cereal exporting countries and the announcement by the Russian Federation to ban wheat exports from mid-ugust to December. The average US wheat export price (US o 2 Hard Red winter) increased by 67 percent, from USD 181 per tonne in July to USD 3 per tonne in early September. However, in the first weeks of October, prices were below September levels 2 reflecting a higher production forecast for ustralia and a reduced export demand. Based on the latest FO production and utilization forecast, wheat production is expected to be 5.1 percent below last year s harvest, but still 5.5 percentage points higher than the -year low registered in 2007/08. 1The Commonwealth of ndependent States (CS) 2Prices in the first 3 weeks of October: USD; USD; USD, The 2010 monsoon floods damaged the standing cereal crops of the Kharif season (rice, maize, sorghum and millet). Total cereal supply losses in 2010/2011 (May/pril) due to the floods are estimated at 4.7 million tonnes: Rice production losses are officially estimated at about 2.4 million tonnes 3, one-third of national production. s a result, 2010 rice production is estimated at 3.8 million tonnes 4 (milled base) compared to 6.7 million tonnes 5 in Total coarse grain (maize, sorghum and millet etc.) losses are estimated at 0.8 million tonnes. n addition, about 1.5 million tonnes of private and public wheat stocks are estimated to have been damaged or lost by the flood waters n addition, according to the Ministry of griculture, 600,000 ha of sugarcane and 200,000 ha of cotton were affected by the floods, 1.2 million animals perished and 6 million poultry were lost. 3MF estimates 4Estimated by authors (WFP/VM) 5Source : Government of Pakistan Domestic cereal supply should satisfy national requirements through pril 2011 Wheat is the country's main staple food, accounting for 35 percent of the total dietary energy supply in Pakistan. From May 2010 to pril 2011, the wheat supply is expected to satisfy national requirements (estimated at 25 million tones for this period) thanks to high beginning stocks (4.3 million tonnes in May 2010) and good pre-flood production (with 23.8 million tonnes harvested before the floods 6 ). Rice is a secondary cereal as far as consumption is concerned but is a substantial export earner. Pakistan

3 PGE 3 SSUE O 16 typically exports between 40 and 60 percent of its domestic production and is the world's third largest rice exporter, with an estimated 2.9 million tonnes exported in 2009/2010. For the 2010/2011 marketing year, the combined impacts of flood-related crop loss and continued emphasis on rice exports (conservatively estimated to be 1.8 million tonnes) is likely to result in a decrease in domestic rice availability. ncreased wheat consumption, however, can likely compensate for this shortfall. 6 Source : Government of Pakistan, Rice data in the chart is calculated by authors (WFP/VM) based on FOST data and forecast data Retail wheat prices remain historically high despite declines between March and ugust 2010 The average wheat retail price in the main Punjab markets continuously increased between 2006 and 2009 and reached its highest level at Rs/kg in December Prices then briefly stabilized (between January and March 2010) at twice the mid-2007 price before showing consistent declines to 25 Rs/kg in ugust. Observed price declines between March and ugust 2010 were largely the result of the new, large wheat crop becoming available in the market. Lower wheat opening stocks in May 2011 and reduced wheat production may lead to increased imports in 2011/2012 marketing year Because of the floods, winter season (Rabi) wheat production for the 2010/2011 marketing year could be reduced by as much as 16 percent compared to 2009/2010 (a wheat planting survey is needed to provide a better estimate). Declines in wheat production combined with lower opening stocks could result in wheat import requirements for the 2011/2012 marketing year. The recovery of agriculture sector in the flood affected areas will take at least five years 7. n non-punjab markets, especially during the 2008 foodprice crisis, the average wheat retail price was more responsive to international prices; between March and October 2008 prices more than doubled, peaking at 33 Rs/kg in October Since then, prices have declined slightly but remain significantly higher than pre-foodprice crisis levels. s in Punjab, wheat retail prices in the main non-punjab markets slightly decreased between March and ugust based on the preliminary analysis by U MDG assessment team DOMESTC STPLE FOOD PRCES Wholesale wheat prices remain extremely high During the 2007/2008 global food crisis, wheat import parity prices in Lahore increased to 5 USD per tonne, but wheat wholesale prices remained much lower at 0 USD per tonne. Since then, however, domestic wheat wholesale prices have risen, overtaking world prices from July 2009 to July n contrast to international wheat export prices, wholesale wheat prices in Pakistan remained stable from June to September Despite this stabilization, however, wholesale wheat prices still remain very high compared to previous years. Overall, in 2010, average wheat retail prices in major non Punjab markets was only a few rupees higher than in main Punjab markets, suggesting relatively good integration between the main markets in Pakistan (this might however not to be the case with less accessible markets, especially in less accessible markets in wheat deficit areas). n September

4 PGE , wheat retail prices ranged from Rs/kg in Gujranwala, Sialkot, Faisalabad of Punjab Province to Rs/kg in Karachi. n September, following the floods, wheat retail prices increased by as much as 21 percent in main Punjab markets n September 2010, with one day of wages, labourers in Lahore could get 12 kg of average quality wheat flour, reduced from 18 kg in September Similarly the amount of wheat flour that could be purchased with one day of wages declined from 13 kg to 9 kg in Multan, from 17 kg to 12 kg in Karachi, from 12 kg to 10 kg in Peshawar, and from 19 kg to 13 kg in Quetta. Between ugust and September 2010, wheat retail prices increased on average by a couple of rupees. This was due stock losses among households and traders in flood affected areas which generated an expected increase in domestic demand. The impact of the floods on average wheat retail prices was less visible in non-punjab markets than it was in Punjab. While prices declined in all Punjab markets between March and ugust, retail wheat prices bounced back in September, with the highest increases observed in Gujranwala and Sialkot (+21 percent). The average wheat retail price in the main non Punjab markets in September 2010 was Rs per kg, similar to prices observed in September otably, however, prices in 2009 and 2010 remain double the pre food price crisis. WGE RTES D COSUMER PURCHSE POWER Consumer purchasing power deteriorating since 2006 Wages play an important role in the household economy in Pakistan, especially in urban areas where they account for almost half of the household income (compared to one quarter in rural areas). Overall, between mid 2007 and 2010, labour wages increased in Pakistan with some inequalities between provinces (wages in Balochistan did not increase). n June 2010, the daily wage rate for unskilled labour ranged from Rs 325/day in Lahore, Rs 0/day in Multan, Rs 5/day in Peshawar, Rs 0/day in Quetta and Rs 375/day in Karachi. The ToT between daily wage rates and RR-6 rice prices also deteriorated during the same period: Lahore from 13 kg to 9 kg in Lahore, Multan from 10 kg to 7 kg in Multan, Karachi from 16 kg to 11 kg in Karachi, Peshawar from 10 kg to 7 kg in Peshawar, and Quetta from 16 kg to 10 kg in Quetta. Short-lived increase in terms of trade during the floods Since 2006, and especially during the 2008 food price crisis, the amount of wheat flour or rice that could be purchased with one day of wages (Terms of Trade ToT- between daily wage labour and retail wheat flour and rice prices) has decreased significantly; Probably as a result of reduced labour supply during the floods, wage rates temporarily increased between June and ugust 2010 (2 percent in Lahore, 1 percent in Multan, 5 percent in Karachi, 7 percent in Peshawar, and 17 percent in Quetta). Given comparatively smaller increases in wheat flour and rice retail prices in the main markets during this period, the increased wages resulted in a temporary increase in ToT for daily labourers; especially in Peshawar, Multan and Quetta. However, this effect was short lived as wages returned to their pre-flood levels in most areas by September.

5 UZBEKST TJKST POPULTO DSTRBUTO FLOODED RES WTH WHET FLOUR PRCES KHYBER GLGT BLTST PKHTUKHW C H PUJB KS CH Peshawar BLOCHST Swat FT 33 T U R K M E S T F G H S T K K SDH CH/D D.G. Khan Wheat Price in Rupees r ab i an S e a ug W 1 ug W 2 Sep W 1 Sep W 2 Sep W 3 Sep W 4 Oct W 1 Oct W 2 Cityame ame City Rahim Yar Khan D Population Distribution in Flooded reas Sukkar Larkana 32 R (S L MC RE P UBL C OF) Multan Jamshoro Population/ Sq Km Other reas o ffected Population ,000 More than 1000 o Population ,000 1, ,570 Flash Flooding (o Data) nternational Boundary Province Boundary District Boundary Line of Control Last Update: September 06, 2010 *FR= Frontier Region rabian Sea Disclaimer 0 For nformation and details contact Vulnerability nalysis & Mapping (VM) Unit of World Food Program (WFP) Vulnerability nalysis and Mapping Unit Source: LandScan 2008, Oak Ridge ational Laboratory. Flood nalysis is based on multiple satellite sensors between July and 02 september UOST, OCH Kilometers The boundaries and the names shown and the designation used on this map do not imply the expression of any opinion whatsoever on the part of World Food Programme concerning the status of any country, territory, city or area of its authorities or concerning the delimitation of its frontier or boundaries.