‘Pakistan lacks warehousing, storage facilities’

KARACHI: State Bank of Pakistan (SBP) Deputy Governor Saeed Ahmad has said that Pakistan is one of the leading agriculture producing countries in the world. However, shortage of warehousing and storage facilities has hampered the development of an efficient commodity trading market, a statement said on Wednesday.
Some other factors such as lack of standardisation, nonexistence of independent collateral verification, lower access to financing and unavailability of transaction data are also affecting the agriculture commodity market, he said.
Addressing the leadership workshop on “Warehouse Receipt Financing in Pakistan” organised jointly by the SBP and Food and Agriculture Organisation (FAO), he said that the warehouse receipt financing was one of the most important initiatives in terms of promoting postharvest agricultural finance in the country.
“In Pakistan, postharvest losses were estimated to be around 25 to 35 percent of crops and horticulture irrespective of the fact that a big part of our population remained malnourished,” the deputy governor said.
“This in turn has led to excessive produce wastages, high price volatility, and lower levels of farmers’ access to finance."
He termed the warehouse receipt financing as an initiative, which could turn around the country’s agricultural landscape.
Ahmad said that the central bank has been collaborating with the Securities and Exchange Commission of Pakistan (SECP) in formulating a regulatory framework for the establishment of Commodity Warehouse Receipt Financing mechanism.
He appreciated the role of Pakistan Mercantile Exchange (PMEX), banks, insurance companies, Food and Agriculture Organisation and other stakeholders and their joint efforts for scaling up this financing system in the country.