Climate Variability, Crop Yields, and Staple-Food Price Volatility in Pakistan: Provincial Panel Evidence

Abstract

Climate variability influences agricultural productivity and staple-food markets; however, comparable provincial evidence from Pakistan is limited. This retrospective ecological panel analysis included Punjab, Sindh, Khyber Pakhtunkhwa, and Balochistan. ERA5-Land-based annual temperature and precipitation data spanned 2019 to 2024. Official provincial wheat yields were available for harvest years 2019 to 2024 (24 province-year observations), and rice yields for 2019 to 2023 (20 observations). January retail prices of wheat flour and broken basmati rice were collected for 2021 to 2025 from Lahore, Karachi, Peshawar, and Quetta, serving as urban market proxies for the provinces. Yield–price panels comprised 16 wheat observations (2021 to 2024) and 12 rice observations (2021 to 2023). Two-way fixed-effects models with HC3 robust standard errors assessed climate–yield and yield–price associations. Price fluctuations were defined as absolute January-to-January logarithmic changes, rather than within-year volatility or province-wide average prices. Wheat yields increased by 26.4% in Balochistan, 21.4% in Punjab, and 5.7% in Khyber Pakhtunkhwa, but declined by 7.3% in Sindh. Balochistan’s rice yield decreased sharply in 2022 before recovering. Annual food-price movements varied by city and commodity. Neither climate–yield nor yield–price coefficients reached statistical significance; yield–price p-values were .899 for wheat flour and .938 for rice. Regional productivity and price movements varied substantially, but the small panels did not establish a reliable climate–yield–price relationship. Longer observation periods and higher-frequency price data are required to support robust agricultural risk assessment and food-market policy decisions.