EDITORIAL: Onion and tomato, much in use in our cooking, witnessed a massive rise in prices in recent weeks as flash floods washed away entire crops, thereby compounding the food emergency situation in the country.
To deal with this crisis, the government decided to issue permits for imports from neighbouring countries to minimise the transport time as well as costs; and concurrently requested the Federal Board of Revenue (FBR) to waive off taxes and levies on import of onion and tomato for the next three months.
While China is a net exporter of onion with Pakistan together with Brazil and the Philippines emerging as the fastest growing export market for China yet with the drought and zero Covid-19 tolerance policy one would assume that Chinese exports of onion and tomato have significantly declined this year.
Prior to the floods, it was relatively easy to distinguish between imported and domestic inflation as reflected in the difference between Consumer Price Index (CPI) and core inflation (non-food, non-energy items). In July CPI was at a high of 24.9 percent, up from June’s 21.3 percent and May’s significantly lower 13.8 percent, while core inflation was 12 percent in July, 11.5 percent in June and 9.7 percent in May 2022.
The reason for the hike in May was due to the rise in the prices of electricity and petroleum and products as unfunded subsidies by the Khan administration effective 1 March 2022 were lifted in two phases notably 27 May and 3 June 2022 — a prelude to the successful completion of the seventh and eighth reviews of the International Monetary Fund (IMF) programme.
However, the Sensitive Price Index, calculated for 51 items of general use, for the week ending 25 August 2022 showed a year-on-year rise of 44.58 percent against 42.3 percent for the week ending 18 August, 37.69 percent in the week ending 11 August and 38.6 percent for the week ending 4 August.
However, the prices of tomato and onion rose significantly in the week past as tomato witnessed a rise of 43.09 percent and onion by 41.13 percent in price against 20.28 percent and 2.30 percent, respectively, for the week ending 18 August, and in the week ending 11 August onion declined in price by 10.18 percent while the price of tomato rose by 10.35 percent. Clearly, floods are accountable for the current situation.
The government, for obvious reasons, has said that it shall assess supplies and consult stakeholders before it allows imports from India as it would entail reversal of the much supported foreign policy decision taken during the PTI administration to ban trade ties with India until the reversal of the 5 August 2019 controversial bill passed by their parliament revoking Kashmir’s special status granted under Article 370 of the Indian constitution.
Fawad Chaudhary, a former federal minister and a prominent member of the Pakistan Tehreek-e-Insaf, has already tweeted with a view to keeping the political pot boiling that his party “will oppose such decisions and never allow trade on the pretext of floods. The government should not betray the blood of the people of Kashmir” at a time when one-third of the country is inundated, 5.2 million people require food, water, sanitation and health support and 33 million Pakistanis have been affected by floods.
Given the political polarisation in the country today to maintain that this is not the time to play politics may be regarded as a partisan comment; however, Business Recorder would urge those whose words are heeded by large portions of the population to focus attention on dealing with the ongoing emergency situation as not only supporters and detractors but also a large number of swing voters (without whose support no party can form a government) are carefully assessing reactions to the existing catastrophe.
Copyright Business Recorder, 2022
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