Macro Bites

Macro Bite # 20

3 min read

The Pakistan Bureau of Statistics publishes the Sensitive Price Indicator (SPI) every Friday. It assesses price movements of 51 essential commodities in 17 cities of Pakistan on a weekly basis. We spent the last few weeks working hard to gather historical data and creating beautiful graphics. This was all futile since yesterday turned out to be a public holiday and the Bureau did not publish any numbers for this week. Stay tuned to receive weekly updates on prices of key commodities from next week!

What challenges do crops in Pakistan face?
By Umer Vakil
Even though we do not have any price updates for this week. We know from last week that food prices have been on the rise. Increase in price of Wheat Flour Bags (+14%) and Refined Sugar (+34%) make the news but other commodities such as Masoor and Mash pulses are also up over 30%. To break down these price increases, we need to understand the challenges faced in growing crops in Pakistan.
Crops Growth In Pakistan
If one just looked at total growth in crops (red line), they would think agriculture in Pakistan is doing really well. But as you can see, most of that increase can be explained by the price deflator (grey line) which measures inflation. The real growth in quantity of crops (green line) has been stagnant, which has led to the pronounced price increases in 2020.
Umer is out to create awareness and bridge the gap between the knowledge of Macro Pakistani’s largely urban audience and the rural affairs that form the backbone of our economy. Read the full article if you are interested in getting an overview of what factors require consideration if we are to boost agriculture in Pakistan. These factors will help us answer questions like why Pakistan has not focused on growing the cotton crop vs. sugarcane, despite having the highest potential for value chain addition.

What Else We’re Reading (Local)

Professor Ahmed Mushfiq Mobarak on handling the COVID-19 crisis, impact of education on productivity (especially on women) and technology’s role in growth (Business Recorder)
Major restructuring of power sector proposed including freeze on consumer tariffs, lower rates for industry and SMEs and devolution of DISCO ownership to provinces (Dawn)
Subsidy of PKR 1,000 per 50 kg bag to be provided on fertilizers as part of Prime Minister’s Package for Rabi Crops, especially Wheat, to pass over relief to farmers (Profit)

What Else We’re Reading (International)

China is in the process of setting its policy direction for the next 5 years, prioritizing self-sufficiency and domestic demand in the face of tensions with the US (Financial Times)
US economy grew at a record pace (33% annualized) in Q3 2020, mostly driven by consumer spending on goods and services powered by government support (Wall Street)
About Us
Macro Pakistani is a data driven research platform that aims to provide a basic understanding of Pakistan’s economy. If you have an interest in contemporary news but are currently overburdened with sensationalism and specialized vocabulary, we are the platform for you.
How are we doing? Please send us any questions, comments or suggestions by replying to this email.

Faiz Ahmed

MBA Candidate at Harvard Business School with prior experience at Bain & Company, International Finance Corporation and State Bank of Pakistan. He is also the Founder of Macro Pakistani.

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