Heavy rains and floods in Pakistan will dramatically increase the demand for food

Prolonged downpours caused by monsoon rains in Pakistan flooded a third of the country and killed more than 1,100 people, including 380 children. Rainfall in the country exceeded the 30-year average by 190%, and the Sindh province with a population of 50 million people was the most affected, with 466% more rain than normal. The UN called the situation an “unprecedented climate catastrophe.”

Prime Minister Shehbaz Sharif called on the world to help Pakistan, saying there was a “significant gap” between the promised aid and the scale of the disaster. He believes that the country can buy Russian wheat without violating the sanctions imposed on the Russian Federation, because people need to be fed, so he continues to discuss proposals from Russia.

Pakistan’s finance minister this week discussed the possibility of partially allowing trade in vegetables with India, with which there is no trade relationship due to strained political relations between the countries.

Authorities say Pakistan will be forced to import some agricultural goods, including onions, tomatoes, potatoes, rice and wheat, as floods have washed away crops. It is planned to buy wheat from external suppliers to replenish the country’s strategic reserves. Now the Pakistani authorities are negotiating with the Russian Federation on the purchase of Russian wheat in order to get the best price. But Russia is also interested in the deal, as sanctions have reduced demand for wheat from some importers, and this year’s harvest will be a record.

In 2021, Pakistan harvested 27 million tons of wheat against a consumption level of 29 million tons, so it imported another 3 million tons. After a sharp rise in prices in April-May, the State Trading Corporation (STC) purchased 500 thousand tons of flour wheat on May 28 at a price of 515, $49/t C&F, July 1 – another 110,000 t at a price of $439.4/t C&F, July 7 – 500,000 t at a price of $439.4/t C&F, July 25 – 300,000 t at a price of 404.86 $/t C&F.

Agreements on the supply of 2 million tons of Russian wheat to Pakistan under interstate agreements have not yet been fulfilled, but against the background of the decline in world prices and sanctions restrictions, the Russian Federation can now agree on the supply of large batches of wheat to Pakistan, which will reduce the pressure on world prices.