Farm production in Pakistan, Asia’s third-largest grower of wheat and the fourth-biggest producer of cotton, may decline 10 percent to 15 percent because of damage caused by floods, according to an industry official.
Crops of rice, sugar cane and corn may be among the worst affected, Nasir Cheema, president of the agriculture chamber of commerce, said by telephone from Karachi, without providing an estimate of how much production may be lost.
Pakistan wants to increase farm output, which accounts for a quarter of its gross domestic product, after wheat and sugar deficits in the past two years caused nationwide riots. Wheat advanced to a 22-month high in Chicago today amid tight global supplies and cotton reached a one-month high in New York on July 30 as stockpiles in the U.S., the biggest exporter, plummeted to the lowest level since December 2004.
“Farm output with the main crops means around 10 percent of GDP, and if livestock is included it means around 21 percent of the GDP growth for Pakistan,” said Sayem Ali, an economist at Standard Chartered Pakistan Ltd. “Any decline in this will definitely hurt the economy since the impact will be passed on to the other sectors as well.”
The country will harvest 23.87 million metric tons of wheat in the year started July 1, compared with 24.03 million tons in 2009, and gather 14 million bales of cotton, from 12.7 million bales last year, the farm ministry said on April 12. Rice output may total 6 million tons, from 6.7 million tons last year.
September-delivery wheat jumped as much as 4.3 percent to $6.90 a bushel on the Chicago Board of Trade, the highest level since Oct. 1, 2008, and was at $6.8875 at 1:30 p.m. London time. Prices jumped 38 percent in July, the biggest gainer of 24 raw materials in the Standard & Poor’s GSCI Index.
Pakistan’s deadliest floods in decades claimed 1,200 lives and the toll may rise as high as 3,000, said Mujahid Khan, a spokesman for Pakistan’s independent Edhi rescue service in the northwest city of Peshawar. The floods have affected a million people overall, the United Nations says.