ISLAMABAD: The withdrawal of official wheat procurement at the minimum support price (MSP) since 2024 has led to a notable increase in the crop’s availability in domestic markets, according to the Food and Agriculture Organization’s (FAO) latest Food Price Monitoring and Analysis report.
With government purchases halted, farmers who previously relied on state procurement opted to release larger quantities of wheat into the open market.
This surge in supply has contributed to further downward pressure on market prices.
The FAO report highlights that in March 2025, retail wheat flour prices across Pakistan displayed varied movements but remained significantly lower compared to the same month last year.
This was primarily due to ample market supplies, supported by a record wheat harvest in 2024.
Global Price Trends Reflect Supply and Demand Dynamics
Internationally, wheat export prices also declined in March. Similar to trends seen in maize markets, uncertainties tied to rising global trade frictions have negatively affected market sentiment.
Additionally, a slowdown in wheat import demand from China has contributed to the overall softening of prices.
Read More: Wheat Harvest Brings Price Crash Amidst Govt Withdrawal
The report points out that U.S. tariff policy uncertainties, combined with early projections of a larger wheat planting area in Canada for the 2025–26 season, triggered a 3% drop in Canadian export prices.
Meanwhile, improving weather and crop conditions in the United States led to a similar 3% fall in benchmark U.S. wheat prices.
These price declines in North America also had ripple effects across Asia, placing pressure on Australian wheat prices, which also recorded a 3% decrease in March.
Seasonal Factors and Exporter Conditions Also Weigh on Prices
The FAO further attributes the global dip in grain prices to the seasonal arrival of Southern Hemisphere harvests, a general softening in global import demand, and reduced fears over crop production disruptions in major exporting countries.
Also Read: Flour Shortage Looms Over New Wheat Policy
Together, these developments have created a bearish environment for global grain markets, contributing to reduced wheat prices both internationally and within Pakistan, where domestic production and policy changes have boosted supply levels. Story by AHmed Mukhtar.
