Food Prices in Pakistan Are World's Second Lowest Despite Inflation
The cost of living in Pakistan is the world's lowest despite recent inflationary trends, according to the Cost of Living Index for mid-2021 as published by Numbeo. Numbeo Grocery Index reports that the food prices in Pakistan are the second cheapest in the world. In terms of local purchasing power, Pakistan ranks 101 among 139 nations.
|Cost of Living Map. Source: Numbeo|
For overall cost of living as measured by Numbeo, Pakistan ranks 139 among 139 countries of the world. It is cheaper to live in Pakistan than to live in any of its neighboring countries in South Asia or West Asia. India ranks 138, Afghanistan 136, Bangladesh 115 and Iran 87.
Local Purchasing Power (LPP) is a measure of relative purchasing power in buying goods and services in a given city for the average net salary in that city. If domestic purchasing power is 40, this means that the inhabitants of that city with an average salary can afford to buy on an average 60% fewer goods and services than New York City residents with an average salary. Pakistan (LPP of 24.56) ranks 101 among 139 countries for Local Purchasing Power. India (42.16) ranks 52, Bangladesh (21.76) 111, Afghanistan (20.53) 112 and Iran (16.82) 124. Switzerland (102.77), the United States (94.32) and Australia (91.07) top the list in terms of local purchasing power.
|Cost of Living Rankings. Source: Numbeo|
For food prices, Pakistan ranks 138 among 139 countries ranked. Only Afghanistan ranks below Pakistan at 139 on Numbeo Groceries Index. India ranks 129 and Bangladesh 112.
|Monthly Cost of Food Per Person in Pakistan. Source: Numbeo|
Using a basket of Asian food types, the cost of feeding one person in Pakistan with a healthy, balanced diet of 2400 daily calories works out to Rs. 10,364.55 for a month, much lower than Rs. 13,635.77 (INR 6201.40) in India. It consists of bread, rice, meat, eggs, fruits and vegetables. The most expensive components of the food baskets are chicken and beef. Reducing the amount of meat can help bring the cost of the meal further down. At Rs. 15,248.41 per month, the cost of western food basket is about 50% higher but still significantly lower than Rs. 19,233.35 (INR 8747.13) in India.
Pakistan is among world's top 10 food producing countries. After a wheat and sugarcane shortfall last year, there are reports of record production of wheat and corn in Pakistan this year. Higher domestic production will hopefully help contain food price inflation in coming months.
South Asia Investor Review
Pakistan Among World's Largest Food Producers
Construction Industry in Pakistan
Pakistan's Pharma Industry Among World's Fastest Growing
Pakistan to Become World's 6th Largest Cement Producer by 2030
Is Pakistan's Response to COVID19 Flawed?
Pakistan's Computer Services Exports Jump 26% Amid COVID19 Lockdown
Coronavirus, Lives and Livelihoods in Pakistan
Vast Majority of Pakistanis Support Imran Khan's Handling of Covid19 Crisis
Pakistani-American Woman Featured in Netflix Documentary "Pandemic"
Coronavirus Antibodies Testing in Pakistan
Can Pakistan Effectively Respond to Coronavirus Outbreak?
How Grim is Pakistan's Social Sector Progress?
Pakistan Fares Marginally Better Than India On Disease Burdens
Trump Picks Muslim-American to Lead Vaccine Effort
Democracy vs Dictatorship in Pakistan
Pakistan Child Health Indicators
Pakistan's Balance of Payments Crisis
Panama Leaks in Pakistan
Conspiracy Theories About Pakistan Elections"
PTI Triumphs Over Corrupt Dynastic Political Parties
Strikingly Similar Narratives of Donald Trump and Nawaz Sharif
Nawaz Sharif's Report Card
Riaz Haq's Youtube Channel
High fuel prices are part of a global energy crunch that has led to big disruptions across China, the United States, the United Kingdom and Europe. Petrol and diesel prices have also spiked in several countries including India and South Africa.
As of September 2021, Hong Kong has the most expensive petrol in the world at $2.56 per litre ($11.63 per gallon) followed by the Netherlands – $2.18 ($9.91 per gallon) and the Central African Republic – $2.14 ($9.72 per gallon). High taxes largely contribute to the high cost at the pump.
The countries with the cheapest petrol include mostly oil-rich countries including Venezuela at $0.02 ($0.09 per gallon), Iran – $0.06 ($0.27 per gallon) and Syria – $0.23 ($1.04 per gallon) according to globalpetrolprices.com.
World food prices rose for a second consecutive month in September to reach a 10-year peak, driven by gains for cereals and vegetable oils, the United Nations food agency said on Thursday.
The Rome-based Food and Agriculture Organisation (FAO) also projected record global cereal production in 2021, but said this would be outpaced by forecast consumption.
The FAO’s food price index, which tracks international prices of the most globally traded food commodities, averaged 130 points last month, the highest reading since September 2011, according to the agency’s data.
The figure compared with a revised 128.5 for August. The August figure was previously given as 127.4.
On a year-on-year basis, prices were up 32.8 per cent in September.
Agricultural commodity prices have risen steeply in the past year, fuelled by harvest setbacks and Chinese demand.
The FAO’s cereal price index rose by two per cent in September from the previous month. That was led by a near four per cent increase for wheat prices, with the UN agency citing tightening export availabilities amid strong demand.
“Among major cereals, wheat will be the focus in the coming weeks as demand needs to be tested against fast-rising prices,” FAO Senior Economist Abdolreza Abbassian said in a statement.
World vegetable oil prices were up 1.7pc in the month, showing a year-on-year rise of about 60pc, as palm oil prices climbed on robust import demand and concerns over labour shortages in Malaysia, the FAO said.
Palm oil futures have rallied further in early October to hit record highs as a surge in crude oil markets has lent further support to vegetable oils used in biodiesel.
Global sugar prices rose 0.5pc in September with concern over adverse crop weather in top exporter Brazil partly offset by slowing import demand and a favourable production outlook in India and Thailand, according to the FAO.
For cereal production, the FAO projected a record world crop of 2.8 billion tonnes in 2021, up slightly from 2.78bn estimated a month ago.
That would be below world cereal use of 2.81bn tonnes, a forecast revised up by 2.7 million tonnes from a month earlier mainly to reflect increased wheat use in animal feed, the FAO said in a cereal supply and demand note.
Global cereal stocks were expected to ease in 2021/22 but would still be at a comfortable level, the FAO added.
Prices for beef, pork and chicken have surged during the pandemic, and the Biden administration believes it knows who's partly behind it: a handful of big meatpacking companies that control most of the country's supply.
Beef prices alone jumped 12.2% over the last year, according to new consumer inflation data on Tuesday, making it one of the costliest items in the surging bills that consumers face today at the grocery store.
"It's just outrageous. I can't even understand how people are supposed to be able to pay that kind of money for basic stuff like ground beef," says Adam Jones, who raises Angus cattle in northwest Kansas. "We're not talking about filet mignon. We're just talking about being able to make spaghetti or being able to make tacos."
The surge in meat prices is contributing to high inflation. The Labor Department reported Tuesday that consumer price index rose 5.3% in the 12 months ending in August. That's down slightly from June and July when inflation was running at 5.4% — but it's still near the highest level in nearly 13 years. Pork prices jumped 9.8% in the last year while chicken prices jumped 7.2%.
Just two sub-categories of food, cereals and vegetables, account for 40% of the CPI food-basket. These two items also account for almost half of India’s agricultural production. Recent inflationary trends display an unprecedented trend of disinflation in cereal prices, which has been happening every month since February. To be sure, disinflation in vegetable prices has been underway since December 2020, but vegetable prices have fallen even earlier. Inflation in edible oil category continues to be very high. If one were to exclude cereal and vegetable prices from the food category, India is at a unique phase as far as the current CPI series is concerned, as prices of other food items have remained sticky at high levels.
Excluding the big items of #cereals & #vegetables, the food inflation in #India is about 10%.https://www.hindustantimes.com/business/a-closer-examination-of-india-s-inflation-story-101634162258609.html
New Delhi, October 19
India is ranked at 71st position in the Global Food Security (GFS) Index 2021 of 113 countries, but the country lags behind its neighbours Pakistan and Sri Lanka in terms food affordability, according to a report.
Pakistan (with 52.6 points) scored better than India (50.2 points) in the category of food affordability. Sri Lanka was even better with 62.9 points in this category on the GFS Index 2021, a global report released by Economist Impact and Corteva Agriscience on Tuesday said.
Ireland, Australia, the UK, Finland, Switzerland, the Netherlands, Canada, Japan, France and the US shared the top rank with the overall GFS score in the range of 77.8 and 80 points on the index.
The GFS Index was designed and constructed by London-based Economist Impact and is sponsored by Corteva Agriscience.
The GFS Index measures the underlying drivers of food security in 113 countries, based on the factors of affordability, availability, quality and safety, and natural resources and resilience. It considers 58 unique food security indicators including income and economic inequality – calling attention to systemic gaps and actions needed to accelerate progress toward United Nations Sustainable Development Goal of Zero Hunger by 2030.
According to the report, India held 71st position with an overall score of 57.2 points on the GFS Index 2021 of 113 countries, fared better than Pakistan (75th position), Sri Lanka (77th Position), Nepal (79th position) and Bangladesh (84th position). But the country was way behind China (34th position).
In the food affordability category, Pakistan (with 52.6 points) scored better than India (50.2 points). Sri Lanka was also better at 62.9 points on the GFS Index 2021.
Edible oil prices continue to surge, helping drive global food inflation to a 10-year peak. Seasonal high demand from major importing countries, and constrained supply by key producers, are propping up prices for palm, soy, and other edible oils.
In the US, Gro’s US Food Price Index is at its second-highest level since the start of the coronavirus pandemic in spring 2020, sending a worrying signal on high food inflation.
Edible oils are a key ingredient used by nearly all consumer packaged goods companies in products ranging from Apple Pop Tarts to Abe’s Zucchini Bread. Continued elevated prices for edible oils are likely to force companies to pass on the higher costs to consumers or swallow the diminished profit margins.
China and India are the biggest importers of edible oils, with domestic demand typically spiking this time of year for seasonal holiday festivals. That has helped palm oil futures to more than double in the past five months on the Dalian Commodity Exchange, and to reach their highest level in over 10 years. Palm oil prices also have rallied along with crude oil, because of its use in biodiesel.
Pakistan’s Prime Minister Imran Khan unveiled $709m package of subsidies for low-income households struggling with food price inflation.
Pakistani Prime Minister Imran Khan unveiled a $709m package of food subsidies to ease the financial burden on low-income households as the prices of essentials continue to soar in the South Asian country.
Addressing the nation on Wednesday evening, Khan described the benefits package as “Pakistan’s biggest ever welfare programme”.
“This package is of Rs 120 billion ($709.2m), which the federal and provincial governments are giving jointly,” he said. “In this, we are [targeting] the three most important food items, ghee, flour and pulses.”
Under the plan, some 20 million qualifying low-income households will be entitled to a 30 percent discount on the purchase of the three items. The federal and provincial governments will make up the difference to retailers in the form of subsidy payments.
The subsidies will last for six months, Khan said, and are aimed at the poorest households, as classified by the government-run Ehsaas welfare programme.
Pakistani households have been dealing with spiralling consumer price inflation (CPI) in recent months, with October’s CPI clocking in at 9.2 percent compared with a year earlier.
Food inflation for core commodities has been particularly high, with the price of ghee increasing by 43 percent, flour by 12.97 percent and certain pulses by 17.62 percent over the last year, according to data from the Pakistan Bureau of Statistics.
The coronavirus pandemic hit the country’s economy hard, with economic growth slowing to 0.53 percent in 2020, according to the World Bank.
Prices for food, energy and other essential goods have skyrocketed around the world this year as countries cast off COVID-19 restrictions, triggering supply shortages and bottlenecks.
World food prices rose for a third straight month in October, the UN Food and Agricultural Organization said on Thursday, hitting a new 10 year high. Last month’s increase was driven by vegetable oils and cereals.
Khan blamed Pakistan’s inflation on international commodity prices, including petrol, claiming that his government had done a better job than others to absorb global price increases.
“What can we do about this? The inflation that is coming from outside. Let Allah make it so that we have all these things in our country, then we can reduce prices, but [not for things being imported],” he said.
Pakistan, which relies heavily on imports of essentials as well as other goods, has also been hit hard by a devaluation of its currency this year.
The Pakistani rupee has lost 13.1 percent of its value against the US dollar since May.
Khan’s government has expanded welfare spending during the pandemic to address unemployment and poverty, disbursing 179 billion rupees ($1.06bn) in grants to low-income families this year, according to government data.
Consumer Price Inflation, however, appears set to continue to increase, with Khan warning in his speech on Wednesday that the government would likely have to raise petroleum and diesel prices, in response to global oil price increases.
In the universities of Lahore, Faisalabad, and Bahauddin Zakariya, demonstration sites have been established. An assortment of food, such as maize, wheat, chili, carrot, and spinach are under research. Nano and earthworm fertilizers have been introduced.
For example, new wheat varieties that combine Chinese and Pakistani germplasms and have the potential to increase the yield by 2.7% per annum have accounted for 3% of the total in Punjab.
For now, three Pakistani students are committed to their construction. “In the near future, more Chinese and Pakistani students will be involved”, said Prof Zhang. “The flourishing of the bio-health agriculture also requires the participation of more enterprises”.
Looking ahead, Naheeda recommends more workshops to be organized in different regions of Pakistan to raise the awareness of farmers and landowners. “Also, the modern techniques in China like compound planting, smart agriculture gain, greenhouse and good varieties should be applied in Pakistan.”
“Olive cultivation and shrimp farming on commercial scale are need of the hour to ensure food security in the country. It will also help in improving exports”, he said while chairing a meeting on Agriculture Transformation Plan in the country, one of the Prime Minister’s Priority Sectors for economic turn-around.
The Prime Minister reiterated that the launch of Kissan Card will facilitate farmers to buy machinery and agriculture inputs.
He directed the authorities concerned to establish centers of excellence in Punjab and Khyber Pakhtunkhwa for research in major crops like cotton, wheat and rice.
The Prime Minister also directed to set up calf-raising centers and introduce better artificial insemination techniques for the growth of livestock and the improvement of milk production in the country.
He directed all the provincial Chief Secretaries to take effective steps for the availability of urea by putting a check on its illegal transportation to neighboring countries, especially Afghanistan.
The Prime Minister was informed that administrative steps were being taken against individuals involved in creating artificial shortage of urea.
The meeting was attended by Industries Minister Makhdoom Khusro Bakhtiar, Minister for National Food Security Syed Fakhar Imam, Planning Minister Asad Umar, Special Assistant to PM on Political Communication Dr Shehbaz Gill, Chief Minister Balochistan Abdul Quddus Bizengo and senior officers concerned.
Chief Minister Punjab Sardar Usman Buzdar and Chief Minister KP Mahmood Khan joined the meeting via video link.