PAKISTAN MARKET MONITORING BULLETIN

Transcription

1 PAKISTAN MARKET MONITORING BULLETIN NOV D EC- 20 H i g h l i g h t s General inflation, based on CPI, decreased from 10.2 percent to 9.7 percent in ember 20 in it increased by 10.2 percent against the same period last year. I N S I D E T H I S I S S U E : INFLATION WATCH (Page 2) PAKISTAN EXPECTS COMPARA- TIVELY A GOOD RICE PRODUCTION THIS YEAR DUE TO FAVORABLE WEATHER CONDITIONS IN THE COUNTRY. (PAGE 2) Pakistan expects comparatively a good rice production this year despite devastations caused by floods and heavy rains in the country Gnment increased wheat support price from Rs.950 to Rs.1050 per maund (per 40KG). Sugar price decreased by percent during ember- ember 20 GOVERNMENT INCREASED WHEAT SUPPORT PRICE FROM RS.950 TO RS.1050 PER MAUND.(PAGE 2) SUGAR PRICE DECREASED BY PERCENT DURING NOVEMBER- DECEMBER 20 (PAGE 2) Global wheat supply has been observed as record high putting a downward impact on global wheat price while domestic prices are on increase affecting household food security. The inflationary trends in the Fuel price continued in ember 20. GLOBAL WHEAT SUPPLY HAS BEEN OBSERVED AS RECORD HIGH PUT- TING A DOWNWARD IMPACT ON GLOBAL WHEAT PRICE (PAGE 3) Consumer purchasing power has slightly deteriorated despite a nominal increase in income level for daily wagers. THE INFLATIONARY TREND IN THE FUEL PRICE CONTINUED IN DECEM- BER 20 AS WELL(PAGE 3) CONSUMER PURCHASING POWER HAS DETERIORATED FURTHER SINCE THE FLOODS (PAGE 4) Vulnerability Analysis and Mapping Unit, World Food Programme, Islamabad, Pakistan. Ph:

2 P A G E 2 Inflation Watch General inflation, based on Consumer Price Index (CPI), increased in ember 20 by 10.2 percent and ember 20 by 9.7 percent against the same periods last year. In ember 20, the CPI decreased by 0.70 percent compared to the previous month. The CPI of Food and Non-alcoholic beverages increased by percent in ember 20 and by 9.53 percent in ember 20 against the same periods last year; a decrease of 2.38 percent was experienced in ember compared to ember 1. Food inflation plays a significant role in food security. Analyzing the percentages of CPI numbers by Commodity Groups & Commodities of some of the daily use food commodities during ember 20, it was noted that several food items registered an increase while others decreased compared to ember 20. Notably, wheat and eggs increased by 2.89 percent and 6.84 percent, respectively, whereas there was a decrease in CPI of onions (27.60 percent), potatoes (22.14 percent) and sugar (17.45 percent Comparing ember 20 to the same period a year ago (- 2010), CPI increased for Gram Whole (22.51 percent), Rice (17.77 percent), and Meat (17.71 percent) and decreased for onions (27.44 percent), sugar (24.57 percent), and main pulses (1.39 percent percent). It is speculated that the prices of most of the food commodities may remain inflated in the due to number of factors including persistent rise in fuel prices during the calendar year 20 - Rs.78/Ltr in January 20 to Rs.99/Ltr in ember 20 (27 percent up)- and increased cost of production (due to higher rates of energy). 1Source: Federal Bureau of Statistics, Pakistan. 2Source: The News, spite the revision, at 9.7 million tones, production in 20 would stage a 2.5 million tones recy from the severely flood-impacted output in Indeed losses are expected to be partly compensated by gains in other growing region, which benefitted from good availability of water for irrigation. More, despite widespread increase in prices of basic input, official assessments attest to a growing adoption of hybrid rice varieties, which may promote yield gains 3. 3Food & Agriculture Organization of the United Nations Gnment increased wheat support price from Rs.950 to Rs.1050 per maund. In 20, wheat crop reached a record level of 24.3 million tons, some 4.2 per cent higher than the previous year s aboveaverage output, reflecting favorable weather condition in the major wheat producing parts of the country. However, in view of the Gnment increase in the wheat support price from Rs.950 to Rs.1050/40kg, prices of wheat and wheat flour have increased. Wheat price in ember has been observed generally near the same levels as a year earlier. In a nutshell wheat supply situation in Pakistan has been satisfactory during and , despite the catastrophe that hit the country for two consecutive years Price of Wheat (F) and Wheat Flour (WF) (Jan- 20) Pakistan expects comparatively a good rice production this year due to favorable weather conditions in the country. 20 Jan- Mar- May- Jul- Sep- - W WF The damages, caused by the heavy rains (20) in rice producing parts of the country, further exacerbate d an already precarious situation left by the severe 2010 floods. However in rest of the country national paddy output is expected to be around 6.7 million tons this year, 35 per cent above the last year s crop, but below the bumper harvests in 2008 and Pakistan also expects to export 3 million tons of rice in view of the good harvest in 20. This seasons inundations are estimated to have spoiled crops an area of hectare extension, chiefly in the lower part of the main Irri producing region of Sindh, in addition to inflicting damages to infrastructure and causing massive population displacements. However, based on October official assessment, all damaged to paddy crops have proven relatively contained, with hectares of plantings destroyed. As a result, current forecast of paddy crops for the year 20, 9.7 million tons (6.5 million tons milled basis) somewhat below the previous forecast of 10.0 million. De- During ember-ember 20 the wheat price remained as Rs.27.5/kg and 28.24/kg respectively in the major cities 4 of the country. The wheat price increased by 2.58 percent in ember October 20 and 2.71 percent in ember ember 20 wheat price. Since mid-20 the wheat price has been increasing and in ember it reached to its highest level. In ember 20 wheat price registered an increase of 6.8 percent against price of October 20. In view of the increased wheat price, wheat flour also surged by 2.13 percent in ember against ember 20 price and 1.83 percent in ember against October 20 price. Like wheat the price of wheat flour has also been observed as its peak in ember Lahore, Multan, Karachi, Peshawar and Quetta Sugar price decreased by percent during ember-ember 20 Sugar remained in the news during the last two months as the price has been decreasing since early ember 20. In

3 10 Jan Feb Mar Apr May Jun Jul Aug Sep Oct P A G E 3 ember the sugar price further reduced to Rs.53.9/KG (average) from Rs.65.5/KG in October 20. The reason for the drastic decrease in guar price is the good opening stock and due to expected surplus production of 4.7 million tons against the annual consumption of 4.2 million tons. Since ember 2009 the sugar price is its lowest level in ember 20. In ember the price reduced by almost 34 percent against the price in January 20. In the year 20 the high price of sugar was observed in August 20 when the price was Rs.75.3/KG. Global wheat production for 20/12 is projected at a record million tons, up 37.4 million from 2010/, and 3.5 million higher than the previous record in 2009/10. The reason for the better global wheat harvest is the favorable wheatear conditions in the world major wheat growing countries like Australia, Argentina, Canada and China. In view of the better global wheat harvest and stabilize demand, the global wheat price has also been decreasing since mid of the current year. The average global wheat price remained USD243/MT which was USD256/MT in October 20. Global wheat prices are expected to decrease further in view of the better wheat supply in the coming days. Domestic wheat price compared to the global wheat price remained 33 percent high against USA (white-soft) 26 percent up against India whereas remained 23 percent down against Afghanistan wheat prices. The domestic wheat price has been increasing since mid -20 as in July 20 the domestic wheat price was 1.3 percent below India, 8 percent up from USA and 30 percent below Afghanistan wheat price. Being a wheat producing country, the price of wheat The inflationary trend in the Fuel price continued in ember 20 as well Global wheat supply has been observed as record high putting a downward impact on global wheat price During the past two months, despite the renewed flooding (20), there has been no significant increase in the retail wheat flour price in country. However, in the reporting month wheat flour price registered an increase of 5 percent against the pre-flood price (June 20) and 9 percent the preflood price of June Wheat flour price somehow registered significant decrease during early 2010; however, with the onset of the devastating flood in July 2010 the prices went significantly high. If wheat flour prices of last three years are analyzed it is observed that the price has almost increased by 80 percent in October 20. Since the start of the current calendar year the fuel price has been increasing, with a certain nominal decreases in mid-20. In ember-ember the fuel price increased further, putting pressure on the already precarious commodity markets. On average the fuel price registered an increase of 5 percent in ember 20 against the price in ember 20. However, in ember 20 the price remained the same level as in October 20. The fuel price was observed at its highest level in the month of ember during the year 20, almost 27 percent high against the price in start of year (Jan) Global Wheat Prices Soft White (FOB) Jan Austrailia USA Afghanistan Pakistan India Global wheat supplies for 20/12 are projected 9.3 million tons higher with larger beginning stocks in Australia and Argentina and a 5.7-million-ton increase in foreign production.

4 P A G E 4 Consumer purchasing power has deteriorated further since the floods The Terms of Trade (ToT) between daily wage rate and wheat flour is the purchasing capacity of households, relying on daily wage as the main livelihood source, and purchase of wheat flour in the market. The average wage rates from major markets of the country have slightly increased in ember and ember 20. However, on the other hand price of wheat and wheat flour have increased in the months as well, which obstructed the TOT to increase rather had decreased it by 2 percent i.e. from 12.7 KG to 12.4 KG for wheat flour.

5 Change in price of Major Commodities City Major Commodities Current Prices % Change Average Change - - Oct Lahore WHEAT KG % 3.84% 1.66% 4.07% Multan % 4.22% -3.12% 0.96% Karachi % 0.00% 7.55% 7.55% Peshawar % 2.35% 8.97%.54% Quetta % 3.16% -8.06% -5.16% Lahore WHEAT % 0.93% 0.35% 1.28% Multan FLOUR AV % 2.56% -2.50% 0.00% QLT. KG Karachi % 1.21% 3.13% 4.38% Peshawar % 0.94% -0.27% -0.55% Quetta % 5.00% -0.83% 3.28% Lahore RICE IRRI % 0.00% 50.66% 50.66% Multan KG % -6.23% 4.05% -2.43% Karachi % 3.49% 28.57% 33.06% Peshawar % -2.43% 8.64% 6.41% Quetta % 0.00% 9.59% 5.26% Lahore RICE BAS % 0.00% 34.85% 31.41% Multan MATI BRO % 0.00% 24.49% 24.49% KEN KG Karachi % 0.19% 22.73% 22.97% Peshawar % 2.87% 27.68% 30.69% Quetta % 0.00% 3.51% -1.67% Lahore SUGAR KG % % % % Multan % % % % Karachi % % % % Peshawar % % % % Quetta % % -28.% % Lahore VEG.GHEE % 0.00% 21.32% 16.47% Multan (TIN) 2.5 Ltr % 0.00% 21.32% 16.47% Karachi % 0.00% 21.32% 16.47% Peshawar % 0.00% 21.32% 16.47% Quetta % 0.00% 21.32% 16.47% Lahore COOKING % 0.00% 21.32% 16.47% Multan OIL (TIN) % 0.00% 21.32% 17.41% Ltr Karachi % 0.00% 21.32% 17.41% Peshawar % 0.00% 21.32% 17.41% Quetta % 0.00% 21.32% 17.41% Lahore GRAM PULSE % 1.% -4.78% -3.% Multan KG % 0.00% 4.76% -1.52% Karachi % -4.01% 9.19% 3.86% Peshawar % 0.00% 1.54% -1.71% Quetta % -2.64% -7.69% % Lahore CHICKEN KG %.71% 9.06% 19.66% Multan % 8.28% 5.91% 15.02% Karachi % 0.61% 1.93% 5.56% Peshawar %.28% 3.43% 22.58% Quetta % -0.18% 2.73% 6.98% Oct 10