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  1. 1. FINAL PROJECT MANAGERIAL ECONOMICS Prof. Amna Majeed DEMAND AND SUPPLY ANALYSIS OF WHEAT AND RICE SECTOR Group Members Nouman Hafeez (104) Farhad Malik (107) Sheeza Junaid (106) Iqra Liaqat (105)
  2. 2. Introduction Agriculture Sector “Pakistan is an agricultural country and 70% of its population is directly or indirectly dependent on agriculture. The sector is facing problems like no effective measures have been taken to curb water wastage, power outages, old methods of cultivation and harvesting and no emphasis on the importance of solving the problems of farmers etc.
  3. 3. Wheat A cereal which is the most important kind grown in temperate countries, the grain of which is ground to make flour for bread, pasta, pastry etc. History Wheat is one of the first cereals known to have been domesticated, and wheat's ability to self-pollinate greatly facilitated the selection of many distinct domesticated varieties. The archaeological record suggests that this first occurred in the regions known as Fertile Crescent. Recent findings narrow the first domestication of wheat down to a small region of southeastern Turkey, and domesticated Einkorn. Wheat at Nevali Cori, 40 mi (64 km) northwest of Gobekli Tepe in Turkey. Turkey has been dated to 9,000 BC. However evidence for the exploitation of wild barley has been dated to 23,000 BC and some say this is also true of pre-domesticated wheat. The country produced a total of 22.8 million tons of wheat in the ongoing fiscal year 2013 – 2.2 million less than the set target of 25 million tons for the year, according to AFP. Pakistan in ranking is at number 7th in the production of wheat.
  4. 4. Sufficient wheat stock available The country has wheat stock of 6.267 million, which is not only sufficient for domestic consumption but also available for export while bumper crop production is expected during next year. As per the latest data, in September 2012, the government had 9.3 million tons wheat in its godowns. When it started releasing the commodity to flour mills. Chief of Agriculture Policy Institute (API) Abdul Rauf Chaudhry told Agency here on Friday that about three million tons of wheat was supplies. Agriculture Forum Pakistan Chairman, Muhammad Ibrahim Mughal has urged Prime Minister, Yousaf Raza Gillani to fix minimum support price for wheat at Rs 1,250 per mond for the next season so that growers work hard and produce more grain to meet the domestic requirement as well as export the surplus. This year “International wheat production is expected at around 670 million tons while the global requirement is 680 million tons. Wheat is a worldwide cultivated grass from the Fertile Crescent region of the Near East. In 2007 world production of wheat was 607 million tons, making it the third most-produced cereal after maize (784 million tons) and rice (651 million tons). Wheat grain is a staple food used to make flour for leavened, flat and steamed breads, biscuits, cookies, cakes, breakfast cereal, pasta, noodles. Wheat is planted to a limited extent as a forage crop for livestock, and the straw can be used as fodder for livestock or as a construction material for roofing thatch. Wheat is the main staple food item of the country’s population and largest grain crop of the country. It contributes 13.1 percent to the value added in agriculture and 2.8 percent to GDP. The size of wheat crop is provisionally estimated at 23.4 million tons, 11.7 percent more than last year crop.
  5. 5. Consumption  “Normally there is more than 20 million tons of (wheat) consumption in Pakistan, but last year only 18 million tons were consumed.” Pakistan, which has been exporting wheat for the last three years, joins a growing list of countries that have seen production curbed, squeezing global supplies and buoying prices.   Pakistan is likely to ship in 800,000 tons to 1 million tons of wheat in the year to March 2014, traders said, the most since 2008-09 and way up from the 200,000 tons bought last year. Supply will mainly come from the Black Sea Region due to competitive prices offered there.   Wheat production in Pakistan slid to 23.3 million tons in 2012-13, the lowest in four years and down from 25 million tons a year ago, according to the US Department of Agriculture. Output in 2013-14 is estimated at 24 million tons.   In Pakistan’s financial centre of Karachi, wheat prices have jumped to $340-$350 a tons from the around $300-$310 a tons typical at this time of year.
  6. 6. Ten Years Consumption Of Wheat Market Year Domestic Consumption Unit of Measure Growth Rate 2003 18900 (1000 MT) 2.83 % 2004 19500 (1000 MT) 3.17 % 2005 20100 (1000 MT) 3.08 % 2006 21700 (1000 MT) 7.96 % 2007 22400 (1000 MT) 3.23 % 2008 22800 (1000 MT) 1.79 % 2009 23000 (1000 MT) 0.88 % 2010 23000 (1000 MT) 0.00 % 2011 23100 (1000 MT) 0.43 % 2012 23900 (1000 MT) 3.46 % 2013 24000 (1000 MT) 0.42 %
  7. 7. GOVERNMENT TARGET FOR WHEAT The government has set the wheat production target at 25.5 million and rice production target at 6.2 million during the current fiscal year 2013-14. About 24.231 million tons of wheat were produced during last fiscal year against the set targets of 25.5 million tons, showing decrease of 4.9 percent, however it was increased by 3.22 percent as compared to the crop production of 2011-12. The production of 13.1 million bales against last year’s level of production resulted in decrease of 3.68 percent. This happened due to flash floods in southern part of Punjab especially in districts of Rajanpur and Daira Ghazi Khan and attack of cotton leaf curl virus.
  8. 8. RICE Rice is the grain with the second highest worldwide production, after maize ("corn"). In Pakistan it’s the 3rd largest crop in term of area after wheat and cotton. Importance of Rice As we know that rice is also a main food item which is mostly liked by all the people of the world. As we know that a person is required to have the basic needs for his life. Approximately 90% of the population lies on the rice because it creates a taste for food and gives many calories and vitamins to our body. Pakistan in ranking is at number 14th in production of rice.
  9. 9. Production of Rice Rice is the second largest produced cereal in the world. At the beginning of the 1990s, annual production was around 350 million tons and by the end of the century it had reached 410 million tons. World production totaled 395 million tons of milled rice in 2003, compared with 387 million tons in 2002. This reduction since the end of the previous Millennium is explained by the strong pressure put on land and water resources, which led to a decrease of seeded areas in some Western and Eastern Asian countries. By and large average rice yield in Pakistan inspite of technological development is comparatively low than China, USA, South Korea, India, Bangladesh, Brazil ect. It needs to increase in order to sustain food security at home and maintain our share in world markets. Basmati is a premium long grain variety of rice, highly valued for its aroma and flavor and exclusively grown in certain parts of the Punjab. The adulteration of basmati rice with other cheaper varieties has become an area for potential exploitation. There is a need a develop a method that enables the differentiation of basmati varieties from other long grain rice in order to ensure consumer protection and for use in regulation of rice trade. The demand of parboiled rice is increasing day by day because Parboiled rice is Rice that has been boiled in the husk. Parboiling makes rice easier to process by hand, improves its nutritional profile, and changes its texture. Polishing rice by hand, that is, removing the bran layer is easier if the rice has been parboiled. It is, however, somewhat more difficult to process mechanically. The brand of parboiled rice is somewhat oily, and tends to clog machinery. Most parboiled rice
  10. 10. Pakistani Rice  Pakistan produces many types of Rice which are very famous among all over the world and most of them are of Export Quality. Following are the main types.    Basmati 2000  Basmati – 385  Basmati – 198  Super Basmati  Basmati 370  Super Kernal  Shaheen (Basmati)   Provincial Shares in Area and Production   The annual production of rice from 2006-07 to 2008-9 has an average of 5.984 million  tones and area of 2679 thousand hectare. The provincial shares in area and production of rice by variety
  11. 11. Production & Utilization of Paddy Rice Evolution of the world production and human food utilization of the Paddy rice from 1961 to 2002 (million tons)
  12. 12. Distribution of the world paddy rice production (average 1999-2003)
  13. 13. Consumption Historical evolution of the main paddy rice consuming countries (human food) in tones between 1961 and 2002.
  14. 14. Recommendations 1. Government shall provide farmers with land for more and more cultivation process. 2. Government should provide interest free loans to the farmers. 3. Proper godowns shall be available for keeping the stock safe. 4. Better fertilizers shall be provide. 5. Proper education and training facilities shall be given to farmers. 6. Proper water sanitation system should be managed. 7. Modern machines for cultivation process like threshers etc shall be given to farmers.
  15. 15. Conclusion Being an agrarian country, agricultural sector of Pakistan’s economy is still backward. Use of modern techniques, provision of credit facilities, basic infrastructure and agriculture research facilities are needed to provide for removing all the problems of agriculture sector. If our government do not take the serious actions in regards so we’ll have to suffer a big loss and might be shortage.