Home Press Release Currency devaluation causes import bill to rise upto $24.77 billion

Currency devaluation causes import bill to rise upto $24.77 billion

Increasing international prices and a significant devaluation of the currency cause import bills to surge. Pakistan's oil and food import bill increased by 58.98% to $24.77 billion.

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Increasing international prices and a significant devaluation of the currency cause import bills to surge. Pakistan’s oil and food import bill increased by 58.98% to $24.77 billion in the July-April period, compared to $15.58 billion in the previous year.

The country’s total import cost climbed by 46.51 percent to $65.53 billion in 10MFY22, up from $44.73 billion in the previous year.

The proportion of these items in the overall import bill increased to 37.79% in 10MFY22. The consistent growth in the import bills for these two industries produces a trade deficit and puts pressure on the government’s external side.

According to data issued by the Pakistan Bureau of Statistics, the import cost for oil grew by more than 95.84 percent to $17.03 billion in 10MFY22, up from $8.69 billion in the same months the previous year. During the same period, home customers faced an extraordinary spike in the price of petroleum products.

Arrivals of palm oil increased 44.64 percent between July and April.

Further analysis revealed that imports of petroleum products increased by 121.15 percent in value and 24.17 percent in quantity. During the review period, crude oil imports climbed by 75.34 percent in value and 1.36 percent in quantity, while liquefied natural gas imports jumped by 82.90 percent. In 10MFY22, the value of liquefied petroleum gas imports grew by 39.86%.

To address the food production deficit, the food import cost climbed by more than 12.30% to $7.74 billion in 10MFY22 from $6.89 billion in the same period the previous year.

The government is also concerned about increased food imports and the resulting trade deficit. In the previous fiscal year, Pakistan spent more than $8 billion on food imports.

The government has chosen to purchase 0.6 million tonnes of sugar and 4 million tonnes of wheat to create strategic reserves so that the import bill will rise further in the coming months.

Wheat, sugar, edible oil, spices, tea, and pulses contributed significantly to the food category. Imports of edible oil increased significantly in both quantity and value. Due to rising global prices, the value of the palm oil import bill increased by 44.64 percent in 10MFY22 to $3.09 billion, up from $2.14 billion in 10MFY21.

As a result, domestic prices for vegetable ghee and cooking oil increased. Soybean oil imports climbed by 101.96 percent in value and 9.30 percent in quantity in 10MFY22 compared to the previous year. In contrast, wheat imports declined 19.12 percent to 2.206 million tonnes in 10MFY22, from 3.61 million tonnes in 10MFY21.

In April, no wheat was imported.

Sugar imports climbed by 49.52 percent in 10MFY22 to 311,851 tonnes, up from 280,377 tonnes in 10MFY21. During the same period, imports of beans, tea, and spices increased substantially.

Arrival of machinery is increasing.

The machinery import bill climbed by 20.49 percent to $9.55 billion in 10MFY22, up from $7.92 billion in the same period the previous year. Imports of mobile phones climbed 7.43 percent year on year to $1.81 billion in 10MFY22. The arrival of mobile phone apparatus climbed by 39.87 percent year on year to $603.54 million.

Imports into the transportation industry surged by 60.04 percent to $3.73 billion in 10MFY22, up from $2.33 billion the previous year. Massive imports of road motor vehicles (build unit, CKD/SKD) were primarily responsible.

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