Over the past 12 months, global corn (corn) prices have risen by almost 50%, with dramatic increases following the Russian invasion of Ukraine. During the same period, the value of Pakistan’s corn exports increased 10 times (!), Which reached $ 120 million in 10MFY22 increased from approximately $ 15 million in fiscal year 21!
The Pakistan Poultry Association certainly seems to think so. Over the past week, the association has published appeals in this and several other newspapers, urging the government not to jeopardize Pakistan’s food security and to impose an immediate ban on corn exports. “Corn is a major component of poultry feed with an inclusion rate of 65%,” the appeal said. At a time when Pakistan is already facing significant shortages of wheat (as a partial alternative feedstock to maize), while other exporting countries such as India (wheat) and Indonesia (palm oil) are experiencing inflation. Security forces are increasingly imposing sanctions to counter the pressure. Home, PPA’s warning appeals to common sense. But what are the facts?
According to the Finance Ministry’s website, Pakistan’s corn production during FY22 is estimated at 9.7 MMT (million metric tons), which is 9% or 0.8 MMT higher than the previous year. But this single digit increase hides the tremendous performance posted by the corn crop in recent years. In less than a decade, Pakistan has doubled its corn crop production, with spring corn production now on par with high-yielding countries such as the United States and Canada. But shouldn’t Pakistan have created a ‘somewhat’ exportable surplus unless domestic consumption surpasses the CAGR of 8.4%?
However, it offers only a partial picture. Poultry producers believe that the season are receiving high-quality grain export orders born in the spring, which would reduce the level of low humidity and aflotoxin as compared to the autumn harvest and is best to use it in the preparation of poultry feed.
Furthermore, given the current pace of world prices, export orders may increase significantly until immediately be put to the ban. But local prices can be justified before the ban grew so fast?
Remember that this is a time when the international market, maize prices increased 50 percent, while 30 percent reduction in the value of the rupee between May 2022 to May 2021.
