Pakistan is stepping up food imports as it sees a surge in demand for staples in neighboring Afghanistan inflating prices at home.
“If demand from Afghanistan increases and we don’t have sufficient stocks, it will put pressure on prices,” Pakistan’s Finance Minister Shaukat Tarin said in a text message. “So we have made arrangements.”
Landlocked Afghanistan has historically relied on Pakistan to meet its needs for everything from cereals to pharmaceutical products. Kabul purchased $871 million worth of goods from Islamabad last year, with food items accounting for 34% of the total, according to Trading Economics.
Pakistan’s Economic Coordination Committee, the nation’s top panel on economy, decided to build strategic reserves in the wake of the evolving situation in Afghanistan, the Finance Ministry said in a statement after it met on Aug. 25. The decision to stockpile sugar comes despite the nation forecast to produce 6.8 million tons of the sweetener, more than the annual local requirement of 5.4 million tons. Wheat production at 27.3 million tons is sufficient to meet domestic demand.