Pakistan
Country has a robust milling industry that supplies flour to Afghanistan.
 
Pakistan is a major rice grower and exporter, while its wheat-producing sector supplies the domestic market as well as delivering flour to neighboring Afghanistan. The market is closely managed by the government to ensure supply to the population.

The International Grains Council (IGC) puts Pakistan’s total grains production at 31.3 million tonnes in 2016-17, compared with 31.1 million the year before. That includes an unchanged 25.5 million tonnes of wheat and an also unchanged 200,000 tonnes of sorghum.

Pakistan is set to import a total of 200,000 tonnes of grains in 2016-17, down from 400,000 the year before. The IGC’s report shows it importing an unchanged 100,000 tonnes of wheat, while exporting 500,000 tonnes, also the same level as the previous year.

Pakistan is a big producer and exporter of rice. The IGC forecast its production in 2016-17 at 6.6 million tonnes, down from 6.7 million the year before. It put exports at 4.3 million tonnes, up from 4.2 million the prior year.

“In Pakistan, where threshing was completed in the final stages of 2016, production is estimated to have fallen slightly y/y, to 6.6 million tonnes,” the IGC said. “According to local reports, this reflected a heavy drop in plantings in Punjab province, to a nine-year low, only partly offset by increased seeding in Sindh. In Sri Lanka, expectations for total output from 17 main (Maha) and secondary (Yala) crops have been scaled back on persistent drought conditions.”

The government is eager to promote exports.

“The Commerce Ministry said on Dec. 20, 2016, that 20 billion Pakistani rupees (U.S.$193 million) will be spent over the next three years as part of efforts to boost commodity exports, including basmati rice,” IGC said.

“Wheat is one of the main agricultural crops in Pakistan, with 80% of farmers growing 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 USDA attaché’s annual report on the grains sector, issued in April 2016, said. “This crop alone contributed about 10% of value added in agriculture and 2.1% of the country’s gross domestic product (GDP) in 2015.”

The Pakistan government has decided to buy 6.95 million tonnes of wheat from the next harvest against the target of 6.6 million tonnes in the previous year. The government has maintained the wheat support price for the MY 2016-17 crop at the last year’s level of 1,300 rupees per 40 kilogram ($310 per tonne).

In an update issued in December, the attaché outlined the latest thinking on the crop.

“The government of Pakistan has set the wheat production target at a record 26 million tonnes for the 2016-17 Rabi (winter) crop that will be harvested in April and May of 2017,” the report said. “During the last marketing year the government also set a target of 26 million tonnes, but drier-than-normal weather and high temperatures resulted in lower yields and 2016 production of 25.3 million tonnes.”

Reports from the field suggested that farmers have completed the sowing of wheat across Pakistan, the report said.

“Wheat area is not expected to change significantly from a year ago,” the USDA noted. “Good rains are predicted during the January-February period, according to the meteorological department. About 90% of the crop is irrigated and irrigation water availability for the upcoming Rabi season is estimated at 30.9 million acre feet (MAF) against the 10-year average of 36.4 MAF and the year-ago availability of 32.9 MAF. This reduction in reservoir levels is not large enough to have a significant effect on planted area or yields.”

Pakistan’s grain production is dependent on irrigation.

“About two-thirds of the country’s water for irrigation is sourced from snow and glacier melts, with the balance supplied by seasonal monsoon rains,” the attaché’s annual report explained. “Stored water for irrigation is held mainly in two large reservoirs, Tarbela and Mangla, for use during the summer and during the Rabi/winter growing season.

“Since the completion of the nation’s irrigation system in the 1970s, demand for water has increased by more than 50%, while storage capacity has decreased by about one-third due to silting. During the last two years, supplies of irrigation water have been relatively better, but over the long term Pakistan is likely to face water-related challenges.”

These water challenges, if not addressed, may become a key factor affecting wheat production, the attaché said.

“Dated farming methods, reduced water availability, dam silting, and an increasing population in the catchment areas of Chenab, Jhelum and Indus rivers have reduced the per capita water availability from 5,000 cubic meters in 1951 to less than 1,000 cubic liters in 2010,” the attaché said. “Eighty-five percent of Pakistan’s wheat production is dependent upon irrigated water.”

The annual report explained that wheat is Pakistan’s dietary staple.

“Pakistan has a variety of traditional flat breads, often prepared in a traditional clay oven called a tandoor,” the report said. “The tandoori style of cooking is common throughout rural and urban Pakistan. Wheat flour currently contributes 72% of Pakistan’s daily caloric intake with per capita wheat consumption of around 124 kg per year, one of the highest in the world.”

Diets are changing in Pakistan, the report said.

“As incomes increase and a stronger middle class emerges, consumers are gradually shifting towards 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.”

The attaché forecast 2016-17 wheat demand at 24.5 million tonnes and explained that just 3% would be used for food, with 97% going for planning and human consumption.

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Milling sector

Pakistan wheat production
Source: U.S. Department of Agriculture
 
Pakistan’s wheat milling industry is privately owned, the attaché explained.


“There are about 1,000 flour mills in Pakistan that meet the consumption needs of about 40% of the population, with the balance met by on-farm consumption,” the attaché said. “The disbursement of government-owned wheat to flour mills is managed in an effort to ensure that sufficient wheat is available throughout the year. In urban areas and among affluent consumers, consumer preference is shifting from higher whole grain to lower extraction flour and traditional flat bread to western-style, loaf bread. Traditional home-ground flour is also losing favor to commercially milled flour. Specialized products like cereals suited to the changing lifestyles in the urban areas are also gaining demand.”

The attaché put 2015-16 wheat exports at 600,000 tonnes, all of it going to Afghanistan in the form of flour and predicted a rise to 700,000 tonnes in 2016-17.

“Afghanistan has been the main wheat export market for Pakistan for many years mainly due to easy accessibility and traditional trade linkages between the two countries,” the report said.

Pakistan’s government does much to manage the wheat market.

“The government considers wheat as the key strategic commodity,” the attaché said. “The federal government sets a minimum guaranteed support price or procurement price and an issue price for wheat sold to flour mills. The system aims to protect farmers from price fluctuations and to ensure a minimum return during cyclical post-harvest low prices. Farmers in Pakistan retain about 60% of their wheat production for seed and village and household food consumption. For wheat that is marketed, the government is the main buyer of farmers’ wheat, with actual volumes of government procurement often reaching 25% to 30% of total production, driven by both food security and market intervention objectives. The remaining 15% of the harvest is purchased by the private sector.

“While food security is an important concern in Pakistan, high volumes of state wheat procurement make it harder to attract private sector trade and investment in the post-harvest supply chain.”

The attaché also explained the importance of rice.

“Rice ranks second among the staple food grain crops in Pakistan and exports are a major source of foreign exchange earnings,” the annual report said. “About 11% of Pakistan’s total agricultural area is under rice during the summer or ‘Kharif’ season. Pakistan is a leading producer and exporter of Basmati and IRRI rice (white long grain rice).”

Biotechnology

Pakistan’s agricultural community is generally supportive of the expanded utilization of biotechnology, the attaché said in a report on the subject.

“Consumer acceptance is more mixed, but the production and consumption of biotech crops is generally accepted,” the attaché said. “No production or trade of animal biotechnologies or cloning is happening in Pakistan.”