LAHORE: Global food prices are poised to keep climbing even after jumping to a record high in August placing the heaviest burden on vulnerable populations while adding to headwinds for the global economic recovery.
Addressing as keynote speaker at a seminar on “ Impact of Food, Oil and Gas prices on Pak Economy in the wake of Russia-Ukraine Conflict” held under the aegis of “Gold Ring Economic Forum“ Coordinator to Federal Tax Ombudsman Meher Kashif Younis said here on Sunday that food prices rose 23.1 percent last year globally, the fastest pace in more than a decade, the highest since 1961.Now war in Ukraine and sanctions on Russia are upending shipments and possibly production for two of the world’s largest agricultural producers, he added.
He said both countries account for nearly 30% of the world wheat exports and 18% of corn, most of which is shipped through Black Sea ports that’s now closed. In South Asia, wheat accounts for only 7% versus 42% for rice, for which price increases so far have been relatively contained, he added.
He said reduced fertilizer supplies, flood devastation and higher oil prices are bound to increase costs for harvesting, transport, and processing food.
Meher Kashif Younis said policy makers must prevent those pressures from fueling food insecurity by avoiding protectionism and increasing social assistance for the poorest. China which holds more than half of global wheat and corn reserves, could consider releasing supplies to Pakistan to lower prices, he suggested. He feared if conflict lasted long, more countries including Pakistan will be confronted with grave challenges.
He said future fuel hikes would be detrimental to Pakistan as it’s bleak economy cannot absorb such shocks. He said the construction industry has also taken a hit because Pakistan was importing steel from Ukraine. Also Pakistani exports to Ukraine have ceased, which will harm local industries and economy, he viewed.
While concluding Meher Kashif Younis said Pakistan was the 3rd largest consumer of Ukraine wheat exports after Indonesia and Egypt. He said Pakistan is currently marred with higher inflation and its trade deficit over US$50bn as of June last is whopping 57% increase over the previous fiscal year. He said only way out in the prevailing scenario is Pakistan and it’s people have to brave this emerging looming ugly situation with courage as whole of the world is grappled with these odd circumstances and not only Pakistan.