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Economy & Trade

Wheat Smugglers Bring High Prices, and Hunger

PESHAWAR, Pakistan, Jun 4 2014 (IPS) - With its lush valleys and well-watered plains, Pakistan’s northwestern Khyber Pakhtunkhwa (KP) province produces plenty of food for the local population, including 10 million tons of wheat every year. So why are the people of this bountiful mountainous region going hungry?

The answer lies just across the 2,400-km-long border that separates the country from neighbouring Afghanistan, in the food-stalls, shops and grocery stores where the bulk of the KP’s foodstuffs are sold for hugely inflated prices.

Locals and experts blame the massive smuggling network that whisks wheat out of Pakistan’s frontier province, leaving behind an unsustainable demand for – and unaffordable price tags on – the basic commodity, which 65 percent of the population relies on as a staple.

According to Zahid Shinwari, president of the Khyber Pakhtunkhwa Chamber of Commerce and Industries, the KP loses some three million tons of wheat to smugglers every year, causing price spikes of over 33 percent.

“The problem gets particularly severe when the local harvesting season ends in June, because that’s when the aggressive smuggling begins,” the official told IPS.

While 50-kg bags of wheat cost nine dollars in 2013, that same quantity now sells for 11 and 12 dollars. At first glance the difference might not seem like much, but in a region where the average monthly income is 60 dollars, some families say the price rise could mean the difference between nourishment and hunger.

As it is, thousands here are walking a fine line. According to a 2008 survey conducted by the United Nations Children’s Fund (UNICEF), 65 percent of children and 40 percent of women living in the KP are malnourished. Take away their basic foodstuffs and the situation will only get worse, experts say.

Muhammad Haroon, a shopkeeper in KP’s capital Peshawar, says the problem is quickly reaching a crisis point, with some 500 to 600 trucks packed with wheat leaving the province every single day.

“We are not getting enough stock from the flourmills for local consumption,” the disgruntled grocer told IPS.

No sooner is the harvest gathered than smugglers make off with the bulk of it, while the rest is immediately purchased and hoarded by the wealthy, in a bid to avoid the inevitable price hikes that accompany the shortages.

In the end, says Haroon, it is the poor who suffer; a full 40 percent of the KP’s population lives below the poverty line, and they are the ones most affected.

On the other side of the border, the smugglers are seen as a godsend.

According to Abdul Qadir, an Afghan trader, his landlocked country has traditionally been dependent on Pakistan for its food requirements, including 80 percent of its wheat needs. Rice, oil, soap and pulses also make their way through checkpoints and onto the shelves of Afghan shops.

Qadir told IPS officials on both sides are equally complicit in the illicit operation because of the high bribes offered in exchange for safe passage through the busy Torkham border crossing close to KP, and the Wesh-Chaman border, which links the Pakistani city of Quetta with the Afghan city of Kandahar.

These bribes, which can reach 100 dollars per truck, push prices of the smuggled goods even higher – up to 45 dollars for a 50-kg sack of wheat – “but still Afghans buy them” according to the trader. He blamed a lack of water, overuse of pesticides and three decades of war for Afghanistan’s perennial food shortages.

Meanwhile, other provinces in Pakistan are starting to feel the heat of the illicit activity.

Chaudhry Ansar Javid, who heads the Sindh chapter of the Pakistan Flour Mills Association (PFMA), says his own province lost 800,000 tons of wheat to Afghanistan last year.

“The wheat flour produced in Sindh also reaches Central Asian states, as well as Iran, through the Chaman border crossing in Balochistan province,” he told IPS.

In the past 15 days alone, Javid said, the price of a 100-kg sack of wheat has soared from 20 to 25 dollars and could go on rising at a phenomenal rate unless the government takes immediate steps to curb the smuggling, or allows Pakistan to import enough wheat to account for the demand in neighbouring Afghanistan.

At present, Pakistan produces some 250 million tons of wheat per year, according to Anees Ashraf, president of the All Pakistan Flour Mills Association (APFMA).

“This includes 16 million tons in the Sindh province, 58 million in Punjab, 2.5 million in Balochistan and 10 million in KP,” he told IPS, adding that the latter has born the brunt of the smuggling operation.

Forced to seek alternative sources of this basic commodity, the KP government has come to rely heavily on some 400 trucks from the Punjab, which carry a daily supply of about 2,000 tons of wheat to the struggling region.

Now, even that lifeline is threatened by the fact that Afghan importers go directly to Punjabi wheat producers and buy up whatever stocks they can get, said Haji Musarrat Shah, vice president of the KP chapter of the APFMA.

Fearing its own shortages, the government of Punjab has imposed a ban on wheat stocks to the Khyber Pakhtunkhwa, he told IPS.

Officials say this move is illegal and are now pressing the Punjab government to lift the ban and spare the people of KP from high prices and hunger.

“Under the constitution it is illegal to stop the supply of anything from one province to another,” KP Chief Minister Pervez Khattak told IPS, adding, “The federal government should intervene.”

Some say the situation is creating a powder keg, with the local population growing ever more hostile towards their neighbours. Already KP is home to some three million Afghan refugees who have been dependent on limited local resources for the past 30 years, according to Khattak.

If prices keep rising, it will put undue pressure on a region that is already fraught with poverty and militancy.

(END)