Monday, August 2, 2021

Food Prices in Pakistan Are World's Second Lowest Despite Inflation

The cost of living in Pakistan is the world's lowest despite recent inflationary trends, according to the Cost of Living Index for mid-2021 as published by Numbeo.  Numbeo Grocery Index reports that the food prices in Pakistan are the second cheapest in the world. In terms of local purchasing power, Pakistan ranks 101 among 139 nations. 

Cost of Living Map. Source: Numbeo


For overall cost of living as measured by Numbeo, Pakistan ranks 139 among 139 countries of the world. It is cheaper to live in Pakistan than to live in any of its neighboring countries in South Asia or West Asia. India ranks 138, Afghanistan 136, Bangladesh 115 and Iran 87. 

Local Purchasing Power (LPP) is a measure of relative purchasing power in buying goods and services in a given city for the average net salary in that city. If domestic purchasing power is 40, this means that the inhabitants of that city with an average salary can afford to buy on an average 60% fewer goods and services than New York City residents with an average salary.  Pakistan (LPP of 24.56) ranks 101 among 139 countries for Local Purchasing Power. India (42.16) ranks 52, Bangladesh (21.76) 111, Afghanistan (20.53) 112 and Iran (16.82) 124. Switzerland (102.77), the United States (94.32) and Australia (91.07) top the list in terms of local purchasing power. 

Cost of Living Rankings. Source: Numbeo


For food prices, Pakistan ranks 138 among 139 countries ranked. Only Afghanistan ranks below Pakistan at 139 on Numbeo Groceries Index. India ranks 129 and Bangladesh 112. 


Monthly Cost of Food Per Person in Pakistan. Source: Numbeo


Using a basket of Asian food types, the cost of feeding one person in Pakistan with a healthy, balanced diet of 2400 daily calories works out to Rs. 10,364.55 for a month, much lower than Rs. 13,635.77 (INR 6201.40) in India. It consists of bread, rice, meat, eggs, fruits and vegetables.  The most expensive components of the food baskets are chicken and beef. Reducing the amount of meat can help bring the cost of the meal further down.  At Rs. 15,248.41 per month, the cost of western food basket is about 50% higher but still significantly lower than Rs. 19,233.35 (INR 8747.13) in India.   

Pakistan is among world's top 10 food producing countries. After a wheat and sugarcane shortfall last year, there are reports of record production of wheat and corn in Pakistan this year. Higher domestic production will hopefully help contain food price inflation in coming months. 

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8 comments:

Yousuf said...

Pakistan Purchasing Power Index the last column is pretty low, where as India Purchasing Power index is much higher. I guess affordability for locals in India will be more with better PPI.

For foreigners living in Pakistan will be better to stretch their dollars.

Riaz Haq said...

Yes. Affordability is a key indicator. Pakistan (LPP of 24.56) ranks 101 among 139 countries for Local Purchasing Power. India (42.16) ranks 52, Bangladesh (21.76) 111, Afghanistan (20.53) 112 and Iran (16.82) 124. Switzerland (102.77), the United States (94.32) and Australia (91.07) top the list in terms of local purchasing power.

However, the bottom line is that there is less hunger in Pakistan than in India, according to the World Hunger Index. India ranks 94th among 107 nations ranked by World Hunger Index in 2020. Other South Asian have fared better: Pakistan (88), Nepal (73), Bangladesh (75), Sri Lanka (64) and Myanmar (78) – and only Afghanistan has fared worse at 99th place. The COVID19 pandemic has worsened India's hunger and malnutrition. Tens of thousands of Indian children were forced to go to sleep on an empty stomach as the daily wage workers lost their livelihood and Prime Minister Narendra Modi imposed one of the strictest lockdowns in the South Asian nation. Pakistan's Prime Minister Imran Khan opted for "smart lockdown" that reduced the impact on daily wage earners. China, the place where COVID19 virus first emerged, is among 17 countries with the lowest level of hunger.

https://www.riazhaq.com/2020/10/india-tops-south-asia-hunger-chart-amid.html


Why is it? Because Pakistan has less inequality than its neighbors.

In 2014, the Center for Global Development estimated median incomes of countries around the world. Here's what it reported for India and Pakistan:

Pakistan: Median Income per capita: $,1204.50, Median Household Income: $6,022.50 Mean (Average) per capita $4,811.31

India Rural: Median per capita $930.75 Median Household $4,653.75 Mean (Average) per capita $5,700.72

India Urban: Median per capita $1295.75 Median Household $6,478.75 Mean(Average) per capita: $5,700.72

It shows that India's urban median income is slightly higher than Pakistan's median income. However, India's rural median income is significantly lower than Pakistan's. It should be noted that 70% of India's population lives in rural areas, much higher than Pakistan's 61%, according to the World Bank.

https://www.riazhaq.com/2017/01/comparing-median-income-wealth-data-for.html

Ranjit S. said...

No matter how low the food prices are anywhere in the world, it’s still very difficult for the poor to buy food.

Riaz Haq said...

Ranjit: " No matter how low the food prices are anywhere in the world, it’s still very difficult for the poor to buy food"

The poor do need help to buy food. There are governments and private charities providing social safety nets in many countries. In the US, there's the food stamp (SNAP) program, and food pantries. In Pakistan, the Ehsaas program provides funds to the poor, and government & private subsidies to help buy food.

Ahmed said...


Dear Sir

Thanks for sharing such useful information, the question is that why inspite of the fact that if Pakistan is much cheaper than many other countries. Then why are people in Pakistan complaining so much about the rising prices of different food items and other goods?

Is this happening because the income of the people is not rising?

I think if income of people in Pakistan start increasing, then I am sure that even if inflation happens in the country, still people will be able to afford and not feel burden on them.

Thanks

Riaz Haq said...

Other than the #OPEC nations, #Pakistan’s fuel prices (petrol Rs. 127 ($0.75) per liter) are among the lowest in the world! #gasoline #petrol
https://twitter.com/haqsmusings/status/1445613011037609993?s=20

https://www.aljazeera.com/news/2021/9/30/infographic-how-the-price-of-petrol-has-changed-2001-2021-interactive

High fuel prices are part of a global energy crunch that has led to big disruptions across China, the United States, the United Kingdom and Europe. Petrol and diesel prices have also spiked in several countries including India and South Africa.

As of September 2021, Hong Kong has the most expensive petrol in the world at $2.56 per litre ($11.63 per gallon) followed by the Netherlands – $2.18 ($9.91 per gallon) and the Central African Republic – $2.14 ($9.72 per gallon). High taxes largely contribute to the high cost at the pump.

The countries with the cheapest petrol include mostly oil-rich countries including Venezuela at $0.02 ($0.09 per gallon), Iran – $0.06 ($0.27 per gallon) and Syria – $0.23 ($1.04 per gallon) according to globalpetrolprices.com.

Riaz Haq said...

#UN #Food Agency FAO: World food prices hit 10-year high. On a year-on-year basis, prices up 32.8% in September, 2021. #wheat #vegetables #oil #sugar #meat #agriculture #Inflation - Pakistan Today https://www.pakistantoday.com.pk/2021/10/07/world-food-prices-hit-10-year-peak-un-food-agency/#.YWHgUjCpkzg.twitter

World food prices rose for a second consecutive month in September to reach a 10-year peak, driven by gains for cereals and vegetable oils, the United Nations food agency said on Thursday.

The Rome-based Food and Agriculture Organisation (FAO) also projected record global cereal production in 2021, but said this would be outpaced by forecast consumption.

The FAO’s food price index, which tracks international prices of the most globally traded food commodities, averaged 130 points last month, the highest reading since September 2011, according to the agency’s data.

The figure compared with a revised 128.5 for August. The August figure was previously given as 127.4.

On a year-on-year basis, prices were up 32.8 per cent in September.

Agricultural commodity prices have risen steeply in the past year, fuelled by harvest setbacks and Chinese demand.

The FAO’s cereal price index rose by two per cent in September from the previous month. That was led by a near four per cent increase for wheat prices, with the UN agency citing tightening export availabilities amid strong demand.

“Among major cereals, wheat will be the focus in the coming weeks as demand needs to be tested against fast-rising prices,” FAO Senior Economist Abdolreza Abbassian said in a statement.

World vegetable oil prices were up 1.7pc in the month, showing a year-on-year rise of about 60pc, as palm oil prices climbed on robust import demand and concerns over labour shortages in Malaysia, the FAO said.

Palm oil futures have rallied further in early October to hit record highs as a surge in crude oil markets has lent further support to vegetable oils used in biodiesel.

Global sugar prices rose 0.5pc in September with concern over adverse crop weather in top exporter Brazil partly offset by slowing import demand and a favourable production outlook in India and Thailand, according to the FAO.

For cereal production, the FAO projected a record world crop of 2.8 billion tonnes in 2021, up slightly from 2.78bn estimated a month ago.

That would be below world cereal use of 2.81bn tonnes, a forecast revised up by 2.7 million tonnes from a month earlier mainly to reflect increased wheat use in animal feed, the FAO said in a cereal supply and demand note.

Global cereal stocks were expected to ease in 2021/22 but would still be at a comfortable level, the FAO added.

Riaz Haq said...

#Meat prices are soaring workdwide, incl #US: #Beef prices alone jumped 12.2% over the last year, according to new consumer inflation data on Tuesday, making it one of the costliest items in the surging bills that consumers face today at the grocery store

https://www.npr.org/2021/09/14/1036678722/chicken-beef-pork-meat-prices-inflation-biden

Prices for beef, pork and chicken have surged during the pandemic, and the Biden administration believes it knows who's partly behind it: a handful of big meatpacking companies that control most of the country's supply.

Beef prices alone jumped 12.2% over the last year, according to new consumer inflation data on Tuesday, making it one of the costliest items in the surging bills that consumers face today at the grocery store.

"It's just outrageous. I can't even understand how people are supposed to be able to pay that kind of money for basic stuff like ground beef," says Adam Jones, who raises Angus cattle in northwest Kansas. "We're not talking about filet mignon. We're just talking about being able to make spaghetti or being able to make tacos."

The surge in meat prices is contributing to high inflation. The Labor Department reported Tuesday that consumer price index rose 5.3% in the 12 months ending in August. That's down slightly from June and July when inflation was running at 5.4% — but it's still near the highest level in nearly 13 years. Pork prices jumped 9.8% in the last year while chicken prices jumped 7.2%.