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Thursday March 28, 2024

Food imports increase to $6.185 billion in 2017/18

By Tariq Ahmed Saeedi
July 21, 2018

KARACHI: Food imports caused capital flight of $6.185 billion from the country during the last fiscal year of 2017/18, weighing down fragile external account in the agriculture country.

Pakistan Bureau of Statistics (PBS) data on Friday showed that food imports marginally rose 0.68 percent from $6.143 billion in the previous fiscal year of 2016/17.

Analysts and traders said Pakistan should need to shift focus on home-grown crops to substitute imports.

Ehsan Malik, chief executive officer of a business advocacy group Pakistan Business Council (PBC) said government should divert financial incentives to edible oil and cotton production from sugar and wheat to lighten up import bill.

“We need fundamental economic reforms that may take one to two years to bring out benefits,” Malik said.

Edible oil imports ate up more than two billion dollars of foreign exchange in a year. Palm oil import increased 7.1 percent year-over-year to $2.04 billion in FY2018, while imports of soybean increased 11 percent to $136 million. PBC chief said India and Pakistan were used to have equal cotton crop size in the past. “But, now India’s crop size is three times than ours,” he added. Pakistan’s cotton imports soared increased 33 percent to $1.1 billion during the last fiscal year.

Malik said local hybrid seed technologies brought about agriculture revolution in the neighbouring nation.

Pakistan experimented on hybrid seeds and began importing them. A demerit of hybrid seeds is their short life cycle as they could be used only three times before losing pesticide resistance.

Analysts said reliance on imported hybrid seeds and lack of localisation could not beget desirable outcomes of hybrid technologies in Pakistan.

Government’s regulatory measures to curb imports stirred inundation of smuggled goods rather than clipping demand. Analysts said people with buying power keep on purchasing imported products despite price hike.

PBS data further showed that oil imports sharply rose 32.1 percent to $14.4 billion during the last fiscal year of 2017/18 as increase in international prices of petroleum products built up pressure on import bill.

Imports of petroleum products amounted to $10.923 billion in the previous fiscal year of 2016/17. Imports of petroleum products rose 9.33 percent to $7.476 billion in FY2018, but they fell 8.3 percent in terms of quantity.

Machinery imports, however, inched down 1.6 percent to $11.569 billion during the last fiscal year as Chinese-pledged infrastructure projects are reaching an advance stage. Imports of power generating plants and electrical machinery and appliances that account for major components in the group slid 12.2 percent and six percent, respectively.

Transport group’s imports increased 31.7 percent to $4.383 billion with imports of cars and motorcycles witnessing double digit growth, PBS statistics showed.