(Bloomberg) -- Pakistan is on a global shopping spree for agricultural goods, such as wheat and sugar, to control soaring prices and even willing to pay higher prices to achieve the goal, the farm minister said.Food inflation surged almost 13% in August as crops in several areas have been destroyed due to heavy rains, pest attacks and locust invasions. Prime Minister Imran Khan’s government is under pressure to bring down prices of essential goods, with the country planning to import huge volumes in the coming months.The South Asian nation may be needed to shell out more money as world prices of wheat, sugar and cotton surged as much as 18% in the third quarter. Pakistan’s presence in the global market could boost prices further. With the economy showing signs of an improvement after contracting for the first time in seven decades, the government seems to be willing to foot the higher bill.“We are going ahead with the imports regardless of rates,” Syed Fakhar Imam, Pakistan’s national food security minister, said in an interview. “This is a requirement and we are not going to wait.”Pakistan plans to import as much as 2.6 million tons of wheat, at least 300,000 tons of sugar and may also need to buy more cotton than last year’s 3.2 million bales, Imam said. Wheat and cotton production fell short of the government’s targets last year as farmers faced an adverse weather and pest attacks and had difficulty in getting some pesticides on time, the minister said.“This year again, the cotton crop was badly affected by extraordinary rains,” he said, adding that some parts of the country recorded the heaviest rainfall in almost a century. “We will definitely import cotton and the volume may be more than last year.”Growth ProspectsThe coronavirus pandemic is not the only potential dampener for Khan’s hopes for spurring economic growth. Poor crop production can also prevent South Asia’s second-largest economy to reach the target of 2.1% growth this year.“Our targets in terms of agricultural growth rates, in particular for our major crops, are going to be affected,” Imam said. About half of Pakistan’s workforce depends on the farm sector for their livelihood.The country will have to spend more to import cotton, wheat and sugar this year to support the textile sector, the biggest employer and foreign exchange earner, and control prices of essential food items. It has already booked 18 vessels to import about 1.09 million tons of wheat by January and issued international tenders to purchase 150,000 tons of sugar.Given lower crop production, inflated food prices and higher imports -- an additional burden on the much-needed dollar reserves in the country that recently avoided a balance-of-payments crisis -- there are plans to increase wheat production to 28 million tons in the next season. The crop will be grown over 22 million acres of land, the minister said.Pakistan is focusing on quality seeds to become self sufficient in wheat production. “One of our major thrusts today is to upgrade our seed technology for all crops. Pakistan requires 1.1 million to 1.2 million tons of wheat seed,” Imam said.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The Commitments of Traders report covering positions held and changes made by money managers in the week to June 2 found that speculators only made relatively small changes. Buying of WTI crude oil, gas oil, copper and cotton were off-set by selling of gold, soymeal, corn and coffee.
Investors seeking markets uncorrelated to the stock market may look to commodities. Commodities are the raw materials that are either consumed or used to build other products. From orange juice to cotton, oil and gas to gold, commodities take many forms.