702 

 

 

Time Series Analysis of Wheat flour Price Shocks in Pakistan: A Case Analysis 

 
Asad Raza Abdi 

Assistant Professor; Department of Economics, Shah Abdul Latif University, Khairpur Mirs, Pakistan 

Ali Hassan Halepoto 

Assistant Professor; Department of Commerce, Shah Abdul Latif University, Khairpur Mirs, Pakistan 

Aisha Bashir Shah 

Assistant Professor; IBA, University of Sindh, Pakistan 

Faiz M. Shaikh 

Assistant Professor; SZABAC, Dokri, Larkana, Pakistan 

 

Abstract 

The current research investigates the wheat flour Price Shocks in Pakistan: A case analysis.  Data was 

collected by using secondary sources by using Time series Analysis, and data were analyzed by using 

SPSS-20 version.  It was revealed that the price of wheat flour increases from last four decades, and trend 

of price shocks shows that due to certain market variation and supply and demand shocks also play a 

positive relationship in price shocks in the wheat prices.  It was further revealed that Government should 

take certain measures to Stable prices of wheat in Pakistan. 

Keywords: Time series, price, shocks, wheat 

 

Introduction
1
 

 
The agriculture sector continues to be an essential 

component of Pakistan’s economy. It currently 

contributes 21 percent to GDP Agriculture 

generates productive employment opportunities 

for 45 percent of the country’s labour force 

and 60 percent of the rural population depends 

upon this sector for its livelihood.  It has a vital 

role in ensuring food security, generating overall 

economic   growth,   reducing   poverty   and   

the transforming towards industrialization. The 

present government is determined to improve 

the quality of life of the people and to banish 

hunger and malnutrition from the country by 

making agriculture an efficient, productive and 

profitable sector of the economy. 

 

                                                 
1
Corresponding author’s details: 

  Name: Faiz M.Shaikh 

  Email address: faizanmy2000@hotmail.com  

In order to improve governance in the public 

sector the government took bold steps and 

brought in the 18
th Amendment to the 

Constitution of 1973. Accordingly, Ministr ies  

performing tasks which were provincial 

subjects were devolved from the Federal level, 

including the Ministry of Food and Agriculture. 

However, realizing the food security concerns 

across the country the government took timely 

steps to establish the Ministry of National Food 

Security and Research to tackle the Food 

Security issues. 

 

The newly created Ministry, under the aegis of 

the present government, has planned to take two 

major steps in order to solve the food security 

issues on a permanent basis. The first step is the 

establishment of the National Food Security 

Council Federal, Province local level 

Governments. Secondly, through a Letter of 

Intent the Ministry, in collaboration with World 

Food Program, is launching the Zero Hunger 

Program worth US $ 1.6 billion to address the 

 

 

 
Asian Journal of Agriculture and Rural Development 

 
 
 

journal homepage: http://aessweb.com/journal-detail.php?id=5005  
 

mailto:faizanmy2000@hotmail.com


Asian Journal of Agriculture and Rural Development,  3(10) 2013: 702-708 

 

703 

 

food security objective. Under this Program the 

Ministry shall donate up to  500,000 metric tons 

of wheat per year and the World Food Program 

intends to negotiate with local  producers to 

exchange part of the donated wheat for High 

Energy Biscuits (HEB) and similar products  

manufactured  in  Pakistan  factories  for 

distributions  through WFP operations to 

primary school children, siblings of 

malnourished children and the vulnerable 

populations especially children at  risk  of 

malnutrition. The fund  wil l  a l so  be  converted 

to fortified wheat flour for distributions aimed at 

combating food insecurity in Pakistan. The 

W F P  wi l l  a l s o  c o o p e r a t e    in t h e  

c a p a c i t y  WFP building   of   the Ministry’s 

officials in   areas addressing food security and 

monitoring progress. 

 

In Pakistan, wheat being the staple diet is the most 

important crop and cultivated on the largest 

acreages in almost every part of the country. It 

contributes 14.4 percent to the value added in 

agriculture and 3.0 percent to GDP. 

 

Over the past three decades, increased agricultural 

productivity occurred largely due to the 

deployment of high-yielding cultivars and 

increased fertilizer use. With the introduction of 

semi-dwarf wheat cultivars, wheat productivity 

has been increased in all the major cropping 

systems representing the diverse and varying 

agro-ecological conditions. 

 

Wheat in Pakistan 
Pakistan has been divided into ten production 

zones because of great agro ecological areas 

where wheat is grown. The zoning is mainly 

based on cropping pattern, disease prevalence 

and climatological factors. However, 

production zones need to be revisited. In 

Pakistan, wheat is grown in different cropping 

systems, such as; cotton - wheat, rice - wheat, 

sugarcane - wheat, maize - wheat, fallow - 

wheat. Of these, Cotton-Wheat and Rice-Wheat 

systems together account about 60% of the total 

wheat area whereas rain-fed wheat covers more 

than 1.50 m ha area. Rotations with Maize-

Sugarcane, Pulses and fallow are also 

important. 

 

Improved semi-dwarf wheat cultivars available 

in Pakistan have genetic yield potential of 6-8 t/ 

ha whereas our national average yields are 

about 2.7 t/ha. A large number of experiment 

stations and on-farm demonstrations have 

repeatedly shown high yield potential of the 

varieties.  

 

There are progressive farmers of irrigated area 

who are harvesting 6 to 7 tones yield per 

hectare. However, farmers yield ranges 0.5 to 

1.3 tons per hectare depending on the amount of 

rainfall in rained areas and in irrigated areas it 

ranges from 2.5 to 3 tons per hectare depending 

upon the amount of water available and other 

factors. 

Table 1: Area, production and yield of wheat 

 

Year 

Area Production Yield 

(000 hectares) % Change (000 tons) % Change (Kgs /Hec.) % 

Changes 2007-08 8550 -0.3 20959 -10.0 2451 -9.8 

2008-09 9046 5.8 24033 14.7 2657 8.4 

2009-10 9132 1.0 23311 -3.0 2553 -3.9 

2010-11 8901 -2.5 25214 8.2 2833 11.0 

2011-

12(P) 
8666 -2.6 23517 -6.7 2714 -4.2 

Source: Pakistan Bureau of Statistics 

P: Provisional (July-March) 

 

 

 



Asian Journal of Agriculture and Rural Development,  3(10) 2013: 702-708 

 

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Table 2: Wheat flour price shocks 

Years 

Acreage 

under 

Wheat(000) 

Production 

under 

Wheat(000) 

Price of Wheat 

Rs/Mons. 

Average 

Price of 

Wheat 

Flour 

1961 6639 3814 15.62 16.46 

1962 4923 4027 14.49 16.88 

63 5022 4170 13.78 16.85 

64 5019 4162 15.25 15.27 

65 5317 4591 16.65 33.34 

66 5155 3916 15.18 14.84 

67 5344 4335 2290 19.32 

68 5983 6418 2026 23.22 

69 6160 6618 17.37 24.50 

70 6229 7294 17.53 32.42 

71 5977 6476 18.27 22.51 

72 5797 6890 20.77 24.19 

73 5971 7442 21.36 33.33 

74 6113 7629 27.54 39.34 

75 5812 7673 40.71 49.5 

76 6111 8691 39.65 46.36 

77 6390 9144 42.37 48.59 

78 6360 8367 46.31 79.64 

79 6687 9950 51.45 68.12 

80 6924 10587 51.88 74.62 

81 6984 11475 58.00 100.00 

82 7223 11304 68.05 139.75 

83 7398 12414 71.08 121.23 

84 7343 10882 74.66 93.06 

85 7259 11703 81.80 100.10 

86 7403 13923 86.76 106.08 

87 7706 12016 85.89 82.38 

88 7308 12675 86.10 105.36 

89 7730 14419 94.43 174.52 

90 7845 14316 104.52 134.83 

91 7911 14565 119.03 107.51 

92 7878 15684 139.99 133.26 

93 8300 16157 147.53 178.74 

94 8034 15213 160.00 257.37 

95 8152 16699 188.71 344.62 

96 8194 16374 190 400 

97 8219 16853 200 423 

98 8280 17417 225 450 

99 8231 17734 250 700 

2000 8349 19210 270 760 

2001 8291 19320 280 800 

2002 8234 19443 300 440 

2003 8243 1955 310 500 



Asian Journal of Agriculture and Rural Development,  3(10) 2013: 702-708 

 

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2004 8543 1988 390 550 

2005 8767 1966 415 500 

2006 8786 1888 514 650 

2007 8876 1988 523 1100 

2008 9000 1991 540 1200 

2009 9200 2000 567 1250 

2010 9230 2100 900 1300 

2011 9240 2150 1000 1400 

2012 9290 2200 1100 1500 

Years Production 

 under Acreage Price  

1961 3814 6639 15.62  

1962 4027 4923 14.49  

63 4170 5022 13.78  

64 4162 5019 15.25  

65 4591 5317 16.65  

66 3916 5155 15.18  

67 4335 5344 2290  

68 6418 5983 2026  

69 6618 6160 17.37  

70 7294 6229 17.53  

71 6476 5977 18.27  

72 6890 5797 20.77  

73 7442 5971 21.36  

74 7629 6113 27.54  

75 7673 5812 40.71  

76 8691 6111 39.65  

77 9144 6390 42.37  

78 8367 6360 46.31  

79 9950 6687 51.45  

80 10587 6924 51.88  

81 11475 6984 58  

82 11304 7223 68.05  

83 12414 7398 71.08  

84 10882 7343 74.66  

85 11703 7259 81.8  

86 13923 7403 86.76  

87 12016 7706 85.89  

88 12675 7308 86.1  

89 14419 7730 94.43  

90 14316 7845 104.52  



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Results 

  

 

According to the table No.2 in which production 

and acreage of wheat were discussed.  There was 

huge difference year to year from 1961-2012.   

The Wheat flour price trend was found to be 

increasing trend.   There was price shocked in 

the years 1955, 188, 2000.2007 where nearly 70-

80% prices were changed. 

 

ANOVA 

 

91 14565 7911 119.03  

92 15684 7878 139.99  

93 16157 8300 147.53  

94 15213 8034 160  

95 16699 8152 188.71  

96 16374 8194 190  

97 16853 8219 200  

98 17417 8280 225  

99 17734 8231 250  

2000 19210 8349 270  

2001 19320 8291 280  

2002 19443 8234 300  

2003 1955 8243 310  

2004 1988 8543 390  

2005 1966 876 415  

2006 2011 8787 514  

2007-08 2088 8765 613  

2009 2090 8900 620  

2010 2100 9000 640  

2011-12 2200 9100 670  

Summary output  

   
Regression Statistics  

Multiple R 0.767893  

R Square 0.58966  

Adjusted R Square 0.559636  

Standard Error 3477.025  

Observations 45  

   

 df SS MS F Significance F 

Regression 3 7.12E+08 2.37E+08 19.63908 4.76E-08 

Residual 41 4.96E+08 12089705   

Total 44 1.21E+09    

        

 

 
Coefficients S. Error t Stat P-value 

Lower 

95% 
Upper 95% Upper 95.0% 

Intercept -5768.27 2665.794 -2.16381 0.036358 -11151.9 -384.585 -384.585 



Asian Journal of Agriculture and Rural Development,  3(10) 2013: 702-708 

 

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Consider gain the demand for Wheat varieties. 

One way to analyze these beverages would be to 

postulate that they form a block independent 

group and then use demand equation. One 

disadvantage of this approach is that equation 

group the nose demand equation. 

 

One disadvantage of this approach is that equation 

involves real income and. through their influence 

on the Frisch price index log P, the price of other 

(i.e. non-Wheat) goods. Conditional demand 

equations deal only with Wheat and thus avoid he 

problem. Accordingly a system with a large 

number of commodities can be transformed into a 

number of smaller. 

 

Independent sub systems, one for each group of 

goods. In this section, we set out detail of this 

approach Recall from the retail price.  Due to 

unstable prices of Wheat consumers are paying 

more every month.   The recent price shocks have 

a negative impact on the consumers. 

 

Residual output 

Observation Predicted Y Residuals Standard Residuals 

1 7322.614 -3508.61 -1.04535 

2 4097.919 -70.9192 -0.02113 

3 4419.852 -249.852 -0.07444 

4 4540.888 -378.888 -0.11289 

5 5250.198 -659.198 -0.1964 

6 5062.623 -1146.62 -0.34162 

7 3926.496 408.5037 0.121709 

8 5492.769 925.2307 0.275662 

9 7408.916 -790.916 -0.23564 

10 7671.597 -377.597 -0.1125 

11 7306.554 -830.554 -0.24745 

12 7080.952 -190.952 -0.05689 

13 7548.519 -106.519 -0.03174 

14 7949.536 -320.536 -0.0955 

15 7479.81 193.1898 0.057559 

16 8192.841 498.1591 0.148421 

17 8864.073 279.9273 0.083401 

18 8930.571 -563.571 -0.16791 

19 9693.868 256.1318 0.076312 

20 10284.67 302.3333 0.090077 

21 10525.48 949.5196 0.282898 

22 11113.28 190.7203 0.056823 

23 11581.05 832.9511 0.248168 

24 11598.95 -716.95 -0.21361 

25 11557.62 145.3781 0.043314 

26 11963.42 1959.576 0.583833 

27 12684.14 -668.135 -0.19906 

28 12034.15 640.8453 0.190932 

29 12980.81 1438.187 0.428491 

30 13326.26 989.7408 0.294882 

31 13572.77 992.226 0.295622 

32 13621.19 2062.812 0.614591 

X Variable 1 1.954231 0.439955 4.441889 6.61E-05 1.065724 2.842739 2.842739 

X Variable 2 -0.71805 1.198775 -0.59899 0.552478 -3.13902 1.702927 1.702927 

X Variable 3 127.9544 47.78352 2.677793 0.010612 31.45359 224.4551 224.4551 



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33 14568.41 1588.586 0.473301 

34 14167.59 1045.411 0.311468 

35 14505.53 2193.472 0.65352 

36 14714.63 1659.367 0.494389 

37 14884.26 1968.737 0.586562 

38 15113.47 2303.526 0.686309 

39 15127.72 2606.28 0.776511 

40 15471.91 3738.087 1.11372 

41 15479.34 3840.659 1.14428 

42 15481.54 3961.457 1.18027 

43 15619.91 -13664.9 -4.0713 

44 16276.69 -14288.7 -4.25715 

45 1403.596 562.4036 0.167562 

 

 

The trend of Wheat flour prices were changes from 

the above trend.  It has direct relationship with the 

demand of the market and supply shortage from 

time to time increased the prices of wheat in 

Pakistan.  In Pakistan have genetic yield potential 

of 6-8 t/ ha whereas our national average yields are 

about 2.7 t/ha. A large number of experiment 

stations and on-farm demonstrations have 

repeatedly shown high yield potential of the 

varieties. There are progressive farmers of irrigated 

area who are harvesting 6 to 7 tonnes yield per 

hectare. However, farmers yield ranges 0.5 to 1.3 

tons per hectare depending on the amount of 

rainfall in rain fed areas and in irrigated areas it 

ranges from 2.5 to 3 tons per hectare depending 

upon the amount of water available and other 

factors. 

 

Conclusion  

 

The current research explores the wheat prices 

shocks and wheat flour prices in Pakistan. The 

results of the analysis indicate that wheat growers 

are response to changes in the wheat of wheat in 

the case of production and acreage under wheat 

response. The lagged wheat of cotton has no 

significant impact on the production of wheat and 

acreage under wheat. This may attributed to the 

reason that cotton is grown on marginal lands and 

usually in the western areas of Pakistan. The 

cultivation of cotton is also risky due to the attack 

of pests. Government of Pakistan should fixed the 

price of the Wheat and also take some measures to 

control the prices of Wheat. 

 

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