Pakistan's Biggest Food Import: Cooking Oil Worth $4.5 Billion Worsens Trade Deficit

Rising demand and soaring prices of cooking oil raised Pakistan's edible oil import bill to $4.5 billion in fiscal year 2021-22, according to government sources. Pakistan is the world's third largest importer of palm oil after India and China. Total cooking oil imports add up to 3.7 million tons while the total annual edible oil consumption is about 5 million tons. Pakistan's palm oil imports are the second biggest commodity import after more than $20 billion in energy imports, accounting for a significant chunk of Pakistan's growing trade and current account deficits.  

Sources of Palm Oil Imports in Pakistan. Source: Dawn


Pakistan Palm Oil Consumption Growth. Source: NationMaster


Pakistan's edible oil consumption has been rising over the years. It is now about 24 Kg per person which is among the highest in the world, according to analysts quoted by Dawn newspaper.  Combined with rising prices, the total imports of palm oil could exceed $6 billion next year. It could further worsen the country's balance of payments problems. Is Pakistan doing anything to try to grow oil palms in the country? Researchers at the Institute of Business Administration (IBA) in Karachi have studied it and reported the following: 

"Based on our research, visits and interviews it was determined that in Pakistan there are ample opportunities and favorable conditions for growing oil-palm trees. Report findings suggest that the coastal belt of Sindh has proven capability of growing oil-palm trees with a per acre yield comparable to that in major oil palm growing countries due to plenty of fertile land, irrigation water courses, supply of fertilizers, and skilled farmers available in this part of land".  

Pakistan Food Imports. Source: TDAP


Sindh Coastal Development Authority (CDA) has recently announced plans to plant 60,000 oil palm trees on an area of 1,000 acres in the current fiscal year.  An earlier project in 2020 showed that the oil content of palm fruit from Sindh's plantation in Thatta is 2% higher than the world average. 

Per Capita Wheat Consumption in Pakistan vs World. Source: Abdul Mottaleb et al


Southern Indian state of Telangana has launched a much more ambitious project to plant palm oil trees on 2 million acres of land in the next four years.  To achieve this goal, the state has plans to build large dams and irrigation canals and import millions of germinated sprouts.

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Riaz Haq said…
With Pakistan's 24 Kg per capita consumption of cooking oil, I am reminded of a
"Panchon unglian ghee (cooking oil) mein", a South Asian phrase describing the image of plenty.

https://www.dawn.com/news/1648260
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It also brings up another South Asian phrase "Aap ke munh mein ghee shakar (sugar)"

Per caput sugar consumption in Pakistan, at about 22 kilograms a year, is slightly above the world average and compares to India's per caput use of 15 kilograms. If the consumption of non-centrifugal sugars were added, apparent consumption would be much higher.

https://www.fao.org/3/x0513e/x0513e23.htm

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Sugar consumption per capita reached 21.1 kg in 2019 in Pakistan, according to Faostat. This is 2.41% less than in the previous year.

Historically, sugar consumption per capita in Pakistan reached an all time high of 25.8 kg in 2008 and an all time low of 1.80 kg in 1961.



https://www.helgilibrary.com/indicators/sugar-consumption-per-capita/pakistan/

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Generally, centrifugal, and non-centrifugal brown cane sugar show a superior nutritional value and bioactive molecule content compared to refined white cane sugardue to the molasses content and the process requiring less refining on different products.

https://www.mdpi.com/2076-3417/12/1/460/htm
Riaz Haq said…
Pakistan: Sugar Annual | USDA Foreign Agricultural Service

https://www.fas.usda.gov/data/pakistan-sugar-annual-5

Due to slight increases in area and sugarcane yields, sugar production in 2022/23 is forecast to reach 7.2 million metric tons (MMT), a marginal increase over the good 2021/22 crop. Sugar consumption for 2022/23 is forecast at 6.1 MMT, which would be a 3.3 percent increase, reflecting population growth and demand from the expanding food processing sector. The production estimate for 2021/22 is increased reflecting the excellent crop last year. As a result, ending stocks are higher, leading to a larger exportable surplus entering 2022/23. Due to the large stocks, and competitive prices, sugar exports are forecast to reach one million tons in 2022/23.
Riaz Haq said…
Pakistan’s total oilseed use to hold steady in 2022-23 | World Grain

https://www.world-grain.com/articles/16662-pakistans-total-oilseed-use-to-hold-steady-in-2022-23

Imports of soybean, canola and palm oil are expected to hold steady at 3.4 million tonnes. No growth is expected in edible oil imports for 2022-23 and are forecast at 3.7 million tonnes(accounting for 70% of total cooking oil consumption in Pakistan). Soybean and rapeseed imports for 2022-23 are forecast to remain on par with the previous year at 2.6 million and 0.8 million tonnes, respectively. While facing significant price pressure and potential for disruption in supplies from key exporters, palm oil is forecast to remain the major imported oil, with imports forecast at 3.6 million tonnes.
Riaz Haq said…
Pakistan: Sugar Annual | USDA Foreign Agricultural Service

https://www.fas.usda.gov/data/pakistan-sugar-annual-5

Due to slight increases in area and sugarcane yields, sugar production in 2022/23 is forecast to reach 7.2 million metric tons (MMT), a marginal increase over the good 2021/22 crop. Sugar consumption for 2022/23 is forecast at 6.1 MMT, which would be a 3.3 percent increase, reflecting population growth and demand from the expanding food processing sector. The production estimate for 2021/22 is increased reflecting the excellent crop last year. As a result, ending stocks are higher, leading to a larger exportable surplus entering 2022/23. Due to the large stocks, and competitive prices, sugar exports are forecast to reach one million tons in 2022/23.
Riaz Haq said…
The government has planned to increase the annual edible oil production up to 4.79 million tons over the next 10 years in an effort to take the country towards self-sufficiency in food commodities, especially in edible oil.


https://tribune.com.pk/story/2364258/govt-plans-to-raise-edible-oil-production-to-48m-tons

Minister for Planning and Development Ahsan Iqbal presided over a meeting on Friday to review the measures being undertaken to achieve self-sufficiency in edible oil.


It was informed that Pakistan imported 4.5 million tons of edible oil annually to meet its demand. At present, the country produces just 0.745 million tons of edible oil annually, which is only 8% of the total demand of over 5 million tons.

The move would help minimise the huge import bill of the food group that was recorded at $7.57 billion in the first 11 months (Jul-May) of fiscal year 2021-22.

The import of palm oil was recorded at $3.06 billion while that of soybean oil stood at $217.7 million during the period under review.

The meeting reviewed the measures being taken for palm oil sufficiency and planned that the production would be gradually increased from the current 0.745 million tons to 1.192 million tons in five years and to 4.793 million tons in the next 10 years.

Ahsan Iqbal directed that the plan to take the country towards self-reliance in edible oil should be discussed with all provincial stakeholders and a feasible roadmap should be finalised within a week after taking all of them onboard.

The minister said investors in the edible oil sector should be given special incentives to boost local production.

He said making the country self-sufficient in edible oil was the top priority of the government’s development agenda and directed to engage the private sector to expedite the process.
Riaz Haq said…
Inflation measured by the Sensitive Price Index (SPI) increased by 0.82 per cent from the previous week, mainly due to a slight increase in perishable food products, according to the Pakistan Bureau of Statistics (PBS) data released on Friday.

https://www.dawn.com/news/1703489/weekly-inflation-continues-to-rise

Last week, a 3.68pc increase was noted in the SPI, which was the highest since the change of the base year for measuring the SPI. On June 17, the second highest increase in weekly inflation was recorded at 3.38pc.

The year-on-year increase in the SPI was 38.63pc, the highest ever recorded. This is the highest increase recorded on a year-on-year (YoY) basis. Last week, the government increased the price of diesel while slightly lowering the price of petrol. The impact of diesel on prices will be visible in prices next week.

The PBS data shows that the prices of 33 essential food items increased during the week under review compared to the previous week.
Riaz Haq said…
Sindh Agriculture varsity plans oil palm trees plantation in Pakistan

https://tribune.com.pk/story/2365859/agriculture-varsity-plans-oil-palm-trees-plantation

The project will be funded by the Pakistan Agricultural Research Council, the university spokesman said adding that the planting of oil palms will be carried out by adopting modern technology.

The three-year project approved by Pakistan Agricultural Research Council for Sindh Agriculture University will be launched under supervision of Dr Allah Wadhayo Gandahi, Professor of the Department of Soil Science.

Gandahi and his team members presented the project documents to the SAU VC Dr Fateh Marri.

------------------

SAU, Dalda Foundation to establish oil palm tissue culture lab

He (Dr Fateh Muhammad Mari) further added that Dalda Foundation may extend its hands of cooperation on providing scholarships to deserving and needy students of the SAU (Sindh Agriculture University) and oil seed farmers desk will be established at SAU Tandojam with public private partnership and farmers will be registered for transfer of technology.

He added that the virgin land of coastal area of Sindh and Balochistan could be brought under oil palm plantation through launching a strategic positive, encouraging campaign. So that the country would be able to become self sufficient in palm oil production domestically.


https://www.brecorder.com/news/40054636
Riaz Haq said…
From Wheat Exporter to Wheat Importer
Dr. Muhammad Shahbaz
July 17, 2022
The writer is research fellow at University of Cambrdige, UK and Professor at Biejing Institue of Technlogy China.


https://mmnews.tv/from-wheat-exporter-to-wheat-importer/


The agricultural sector is one of the largest contributors to the economy. While declining as a proportion of GDP, agriculture still contributes one-fifth of Pakistan’s wealth and almost half the population depends directly or indirectly on agriculture for their livelihoods. With 79.6 million acres of arable land, there is a great potential for improving efficiencies and productivity of the agriculture sector. The crop sector is an important sector of the economy which provides food to rapidly growing population of the country. The major crops consist of six main crops: wheat, rice, sugarcane, maize, chickpea and cotton. Wheat is Pakistan’s largest crop, in terms of area sown and is grown under different agro-ecological zones. Wheat flour currently contributes 72% of Pakistan’s daily caloric intake with per capita wheat consumption of around 124 kilograms (kg) per year, one of the highest in the world. In irrigated areas, wheat is planted after cotton, rice, and sugarcane, while in rain fed areas wheat is grown at the same time as maize and millet. The sowing of wheat takes place from October to December and harvests from March to May. Approximately 80% of farmers grow it on an area of around 9 million hectares (close to 40% of the country’s total cultivated land) during the winter.

Wheat is the most widely grown crop in the world. Wheat (Triticum aestivum) is one of the first domesticated food crops and has been the basic staple food of the major civilizations of Europe, West Asia and North Africa for last 8000 years. Approximately one sixth of the total arable land in the world is under wheat. It is most demanded food grain and its production leads all crops, including rice, maize and potatoes. In Pakistan, wheat being the main staple food cultivated on the largest acreages. Pakistan falls in ten major wheat-producing countries of the world in terms of area under wheat cultivation, total production and yield per hectare. Wheat is the essential diet of population as it constitutes 60% of the daily diet of common man in Pakistan and average per capita consumption is about 125 kg and occupies a central position in agricultural policies of the government. Based on cropping pattern, disease prevalence and climate, Pakistan has been divided into a ten production zones. However, production zones need to be revisited. In Pakistan, wheat is grown in different cropping systems, such as; cotton wheat, rice wheat, sugarcane wheat, maize wheat, fallow wheat. Of these, Cotton-Wheat and Rice-Wheat systems together account about 60% of the total wheat area whereas rain-fed wheat covers more than 1.50 m ha area. Rotations with Maize-Sugarcane, Pulses and fallow are also important.

Riaz Haq said…
From Wheat Exporter to Wheat Importer
Dr. Muhammad Shahbaz

https://mmnews.tv/from-wheat-exporter-to-wheat-importer/


Pakistan’s growing population is seeing an increased demand for wheat. However, the production of the commodity is not rising at a proportional rate. Pakistan’s 2020-21 marketing year wheat production is expected to decrease to 25.2 million tons due to the impact of untimely rain at harvesting. Despite having fertile lands and bumper wheat crops, Pakistan had to import four million tons of wheat last year. South Asian country has undergone a historic shift from being an exporter of wheat to a major importer of wheat. Agricultural experts of Pakistan have called upon the government to impose a ban on wheat exports of local grains amid serious repercussion of the Russia-Ukraine war, which will disrupt the supply of wheat in the international market. A farmer’s lobby group, has suggested the government to maintain wheat stocks through procurement during the on-going harvest and put a stop to wheat exports. It should be noted that Ukraine is the third largest exporter of wheat, holding at least 12% share in the global export market for the staple grain. The war in Ukraine will push the prices higher and opportunists might sell off the food security to fill their coffers. The escalating tensions between Russia and Ukraine will have a serious economic fallout, effects of which have already started to show in Pakistan. Local prices of gasoline, food, commodities, and steel and semiconductor chips are witnessing a major increase. Pakistan is the seventh-largest market in the Middle East, African, and South Asian regions, as measured in Purchasing Power Parity (PPP). It has the second-largest economy in South Asia, after India. The economy has been growing slowly over the past two decades. However, the containment measures adopted in response to the COVID-19 pandemic led to a severe contraction in economic activity.

Pakistan has bought wheat regularly in the global market in recent months to boost domestic supply and cool prices. Pakistan’s MY 2020/21 wheat imports are estimated at 3.4 MMT.
Riaz Haq said…
Pakistan’s total grains imports, all of which are wheat, in 2021-22 are forecast at 2 million tonnes, down from 4 million the year before. The country is expected to export 200,000 tonnes of wheat, the same amount as in 2020-21.

https://www.world-grain.com/articles/15862-focus-on-pakistan

Production of rice in 2021-22 is forecast at 7.8 million tonnes, up from 7.6 million the year before. Exports of rice in 2021-22 are put at 4.2 million tonnes, up from 4 million.

The IGC also forecasts Pakistan’s imports of rapeseed at 900,000 tonnes, unchanged from the previous year.

In an annual report on June 24, the US Department of Agriculture (USDA) attaché puts Pakistan’s maize production in 2021-22 at a record 7.9 million tonnes, up from 7.8 million the previous year.

“Wheat is Pakistan’s largest crop, in terms of area sown and is grown under different agro-ecological zones,” the attaché explained. “In irrigated areas, wheat is planted after cotton, rice, and sugarcane, while in rainfed areas wheat is grown at the same time as maize and millet.

“Sowing of wheat takes place from October to December and harvests from the month of March to May. Approximately 80% of farmers grow it on an area of around 9 million hectares (close to 40% of the country’s total cultivated land) during the winter or ‘Rabi’ season.”

The attaché added, “Wheat is Pakistan’s main dietary staple. Pakistan has a variety of traditional flat breads, often prepared in a traditional clay oven called a tandoor.”

Wheat flour contributes 72% of calorific intake, with per capita wheat consumption at around 124 kilograms per person each year, one of the highest levels in the world. About 95% of wheat used in Pakistan goes for human consumption.

“As incomes increase and a stronger middle class emerges, consumers are gradually shifting toward more dairy, meat, and other higher-value food products in their diet,” the report said. “Over the long term, this shift to a more balanced diet has the potential to limit the pace of growth in wheat consumption.”
Riaz Haq said…
Wheat Consumption Determinants and Food Security Challenges:
Evidence from Pakistan
SANIA SHAHEEN, LAL K. ALMAS, MUHAMMAD USMAN


https://wseas.com/journals/ead/2022/a865115-797.pdf

Since 1975, 27% increase in
total area and 52% increase in yield per hectare for
wheat are reported. While, 33% increase in wheat
availability per capita was deemed insufficient. In
this situation, imports of wheat were the most
apparent result due to higher growth of population.
To fulfill the dream of food self-sufficiency,
government facilitated farmers by providing high
yielding varieties, fertilizers at a subsidized rate,
irrigation water at a lower rate than tube well water
etc. Though, these facilities have not been able to
reach the desire level of output mainly due to (i)
poor economic conditions of the farmers, lack of
knowledge on the latest useful techniques and
advancement. (ii) low price of production at
harvesting time made the farmers insecure about
investments they have done for inputs. (iii)
inappropriate land levelling along with late sowing
resulted in lower production. (iv) Insufficiency,
inequity, and unreliability in water distribution are
mutually affect the farmers irrigation calendars for
the wheat crop. Water stress to wheat at sensitive
stages, hinders the entire effort of production [20].

Riaz Haq said…
Wheat Consumption Dynamics in
Selected Countries in Asia and Africa:
Implications for Wheat Supply by 2030 and 2050
Khondoker Abdul Mottaleb, Kai Sonder, Santiago López Ridaura and Ayman Frija

https://repository.cimmyt.org/bitstream/handle/10883/21871/64912.pdf?sequence=1&isAllowed=y

Wheat is the principal staple crop of Pakistan. In
TE2018, the country’s yearly per capita total wheat
consumption was 110 kg, supplying a daily per capita
calorie intake of 920 kcal and constituting 37% of the
total daily calorie intake per person. Since the 1990s,
yearly per capita wheat consumption in Pakistan has
been on a slight decline (Figure 1). While the country’s
wheat yield falls below the world average (Table 1),
Pakistan has been highly successful in achieving
wheat self-sufficiency, thanks to several strategic
imports (Figure 2). In 2019, the country produced
more than 24 million t of wheat with a yield of 2.8 t/ha
from 8.7 million ha of land. The output was enough to
meet 99% of Pakistan’s total wheat demand for 2019
-----------

For China, Rozelle and Huang (1998) projected that
considering low- and high-income growth, yearly
per capita wheat consumption in China would fall
between 80-83 kg by 2020. In 2018 however, actual
yearly per capita wheat consumption was 64 kg
(FAOSTAT, 2021a). For Pakistan, applying the AIDS
model estimation procedure and using the Household
Integrated Economic Survey 2007-08 datasets, Nazil
et al., (2012) forecasted that by 2019-20, yearly per
capita wheat consumption for Pakistan would fall
between 115-118 kg and the total demand for wheat
will be 24.2 million t. In 2018 however, actual yearly
per capita wheat consumption in Pakistan was 110
kg and the total wheat consumption was 23.3 million
t (FAOSTAT, 2021a). This demonstrates that the
majority of wheat consumption forecasts fall short
in reality and highlights the need for consumption
forecasting that uses innovative methods and models.

https://repository.cimmyt.org/bitstream/handle/10883/21871/64912.pdf?sequence=1&isAllowed=y
Riaz Haq said…
Finance Ministry launches ’75 Years Economic Journey of Pakistan’


https://www.app.com.pk/business/finance-ministry-launches-75-years-economic-journey-of-pakistan/

He (Finance Minister Miftah Ismail) said that a country with 30 million population in 1947 could not feed its population and had to import most of its food requirements from abroad, adding that today, local agriculture production has risen significantly and Pakistan was producing over 26.4 million metric tons of wheat annually as compared the total output of 3.4 million tonnes in 1948, besides cotton attaining a level of more than 8.3 million bales in 2022 compared to 1.2 million bales in 1948.

The sugarcane production, he said has reached to 88.7 million tonnes in 2022 as compared to 5.5 million tonnes in 1948 and rice output was recorded at 9.3 million tonnes during 2022 as against the total production of 0.7 million tonnes in 1948, the minister added.

Finance Minister said that Pakistan constructed both large and small dams like Tarbela Dam and Mangla Dam, which increased the water storage and availability to 131.0 MAF in 2022 from 63.9 MAF in 1965-66, adding that it helped in achieving sustain agriculture sector growth in the country.

He said that Pakistan emerged as one of the leading world exporter of textiles, pharmaceutical goods and food related items and economic policies of the successive governments have promoted industry, agriculture and services sectors.

The perseverance of its people made Pakistan the world’s 24th largest economy in terms of purchasing power parity and 44th in terms of Nominal GDP, he said adding that in fiscal year 1950, the Nominal GDP was Rs10.1 billion about $3.0 billion whereas, GDP per-capita was Rs286 with a population of 35.3 million.

In Fiscal Year 2022, Nominal GDP stands at Rs66,950 billion or $383 billion whereas, per-capita income has reached at $1,798 in 2022, he said adding that the country successfully established its trade and economic ties with different countries and entered into several global trading arrangements like WTO, SCO, WCO, the South Asian Association for Regional Cooperation, China Pakistan Economic Corridor, bilateral and multilateral agreements including EU-GSP Plus scheme.

Miftah Ismail said that all these successes were possible due to dedication, hard work and resilience of people of Pakistan, adding that enhanced economic governance have paved the way for a prosperous and strong Pakistan.

He further said that given the current economic fundamentals and sound economic policies being adopted by the present government, country was all set to become an economic power house of the world.

Meanwhile, Federal Secretary Ministry of Finance Hamed Yaqoob Sheikh said that the 75 years journey of Pakistan was a story of economic, political, social and regional events that has shaped the country that we live today.

He said that several boom-bust cycle, political crises and myriad geo-strategic challenges have guided our policies and program.

Today, he said Pakistan was ranked among 50 leading economies of the world with GDP amounting $383 billion, adding that it also established its vibrant banking system that supported economic development over the years .

Riaz Haq said…
India’s poorest scald as cooking oil prices soar

https://asia.nikkei.com/Spotlight/Feeding-Asia/India-s-poorest-scald-as-cooking-oil-prices-soar


India’s #poor scald as #cooking #oil prices soar. #India’s poorest are paying the highest cost for a #food #crisis long in the making and now turbocharged by events ranging from the war in #Ukraine to policy changes in global #trade. #inflation #Modi #BJP

India consumes 16.5 kg of cooking oil per capita, significantly higher than 9.5 kg in China, and nearly double 8.4 kg in the United States.
The numbers, skewed by heavier use in urban areas, mean that the world’s second most populous nation is particularly hit by the record highs. (Pakistanis consume 24 Kg per capita, the highest in the world)

--------

On a muggy April afternoon, Kumud Sahu wipes his face with an oily turmeric-stained handkerchief. He gulps water from a dimpled plastic bottle as he haunches on a wooden bench. It’s the only place to sit at his roadside eatery in the bustling working-class neighborhood of Jawaharlal Nehru Road in the eastern Indian city of Kolkata.

“Life has always been tough,” says Sahu, scanning the swarming crowds oblivious to the slow unraveling of the stalls that serve their affordable lunches. “But I haven’t seen tougher days than these. Business has been extremely bad and I am not sure how I can continue to feed my family.”

As the world’s largest importer of cooking oil reels from a steep ascent in its price, India’s poorest are paying the highest cost for a crisis long in the making and now turbocharged by events ranging from the war in Ukraine to policy changes in global trade.

India is reliant not only on cooking oil but on imported cooking oil. The South Asian nation consumes nearly 25 million tonnes of cooking oil a year, but produces only about 11 million tonnes. The gap is met through imports.

That creates a big and growing problem for a country whose population is expected to surpass China's and hit 1.7 billion people in the next three decades.

And experts say India will be unable to wean itself off this dependence for at least another two decades, as demand in a country that uses oil for much of its cuisine continues to far outpace production.

It is among the most disturbing examples of how a worldwide spiral in food prices has spooked billions of people and their governments. A deadly storm of pressures including war, pandemic and global heating has dramatically increased the cost of household food baskets in countries rich and poor. It has raised fears of mass impoverishment and social unrest, like that seen in neighboring Sri Lanka.

Sahu looks enervated. It has been 12 hours since he began his day in a room no bigger than 11 sq. meters, where he lives with his wife and three children. They share a bathroom with three other families in a longstanding tenement. Just before sunrise, he sets out for his eatery, cycling about 10 km. There he sells cheap, tasty lunches, oily curries with enough calories to keep his customers full until the next meal.

“Prices have increased so much that we can't imagine what will happen to the business if this trend continues,” he says, squinting in the harsh Kolkata sunlight. “I am putting in money from my savings to keep the business afloat.”

Sahu has shied from passing on the costs to his price-sensitive clientele, many of whom are shopkeepers and small business owners themselves.

With snowballing costs and a determination to keep his children in a school that is inexpensive but not free, Sahu was forced to sell a piece of rural land that he had hoped to keep as an asset for the years to come. “It bought me some time,” he said.

Pulling in around 60% of its cooking grease from overseas, India was hurting even before the Ukraine war as shipping costs, energy inflation and labor shortages, along with extreme weather, kept thrusting food and oil prices higher.

Riaz Haq said…
Pakistan's central bank unexpectedly raised its key policy rate by 100 basis points to 16% on Friday to ensure high inflation does not get entrenched.
The move brings the State Bank of Pakistan's (SBP) 2022 hikes to 625 basis points. It kept the rate unchanged at its last two meetings in October and September.

https://www.reuters.com/markets/asia/pakistan-cenbank-raises-key-rate-by-100-bps-16-curb-inflation-2022-11-25/

Analysts at the post-policy briefing told Reuters that SBP Deputy Governor Murtaza Syed said the bank responded as inflation had moved beyond a transient shock in food and energy prices to show up in core inflation.

Syed also said the bank did not want high inflation expectations to become entrenched, and aimed to get ahead of broader pressures on the economy, they added.
"Looks like SBP is more concerned with rising inflation. Moreover IMF talks for next tranche is under way and is delayed, that may have also compelled the committee to take this step to fight inflation," Topline Securities' Chief Executive Mohammed Sohail said.
Pakistan's timely finalisation of a recovery plan from the floods is essential to support discussions and continued financial support from multilateral and bilateral partners, the International Monetary Fund (IMF) said on Wednesday.
"Too much emphasis on current inflation," Fahad Rauf, head of research at Ismail Iqbal Securities, told Reuters. "On a forward looking basis, inflation is going to head downwards."
He estimated a drop in November CPI to 24% from 26.6% in October. Economic activity indicators signal a sharp slowdown and another rate hike will do more harm than good by increasing the government's debt burden, hurting the private sector and causing higher unemployment, he added.
The SBP affirmed a Gross Domestic Product estimate of about 2% for fiscal 2023 and a current account deficit forecast of about 3% of GDP. However, it now expects higher food prices and core inflation to push average inflation to 21-23% instead the previous estimate of 18-20%.

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