ISLAMABAD: The Economic Coordination Committee of the Cabinet Thursday approved import of 900,000 metric tons of wheat in phases in order to avert shortages of wheat/flour in the country.The...
ISLAMABAD: The Economic Coordination Committee of the Cabinet (ECC) Thursday approved import of 900,000 metric tons of wheat in phases in order to avert shortages of wheat/flour in the country.
The Trading Corporation of Pakistan (TCP) will import wheat.
An official statement issued by the Ministry of Finance did not mention any figure for allowing import of wheat.
A federal secretary who did not attend the ECC meeting told this reporter that on the recommendation of Ministry of Food Security, the ECC had endorsed import of 900,000 metric tons of wheat in phases. The ministry had moved summary for import of 1.5 million tons of wheat.
“It was decided that the TCP will start importing wheat in the required quantities through small tenders from time to time to maintain wheat supply at a reasonable price and for keeping additional strategic reserves,” the official statement issued after the ECC meeting stated on Thursday.
Official sources said wheat/flour shortages were really hurting the poor segments, as the prices of wheat/flour were escalating in different parts of the country. The price of flour has touched Rs68 per kg on the domestic market.
The ECC had sought details from the provinces about their available stocks before taking the decision to import wheat through the public sector.
A minister told The News that delay in taking a decision on importing wheat would damage the government, as it had been discussing import of wheat from last February 2020.
According to an official statement, Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the ECC meeting at the Cabinet Division here.
The ECC discussed in detail the need to import wheat in through the government and private sector. The chair directed that availability of wheat was an important issue and there was a need to maintain sufficient stocks of commodity in the country which could be made available at a reasonable price.
The official sources said escalation in the price of wheat/flour would add pressures to the rising food inflation, as the price of a roti possessed psychological pressure so the prices of other food items would surge and overall CPI based inflation would also pick up in months ahead.
In its policy note to the government, the Competition Commission of Pakistan (CCP) recommended that a paradigm shift be brought in wheat releases and for resolving the looming wheat/flour crisis on immediate basis, it asked for binding flour mills to produce 100 percent flour out of 65 percent released wheat and impose ban on all other products including maida, suji, choker etc.
The CCP recommended that the flour mills were not producing flour out of 65 percent released wheat and there was no proper monitoring and reconciliation mechanism, aggravating the wheat/flour shortages in the country at the moment.
The CCP found that the government fixed the support price at Rs1,400 per 40kg and they procured 6.5 million tons against fixed target of 8.5 million tons. However, the market price of quality wheat hovered around Rs2,200 to Rs2,400 per 40kg so the real benefit of increased wheat prices was not transferred to small farmers.
The policy note also found that Chakki catered about 2/3 or 75 percent market share but flour mills were getting released wheat procured by the public sector. The flour produced by the mills is not considered as good quality/eatable flour.
In its policy note, the CCP recommended gradual withdrawal of government intervention from minimum support price fixation regime, consistent wheat export policy, removal of overlapping of regulatory regime between provincial and federal legislations and a level playing field in the wheat sector.
The policy note recommended that the federal and provincial governments may only intervene by making judicious use of their strategic reserves, when there is dire shortage of wheat in the market due to abnormal market conditions. It may define and experiment with the idea of expanding the role of the private sector, millers, and stockists in the procurement, trade, and bulk storage of wheat.
A top official said the food ministry had worked very hard to streamline the issue but the problem arose because Punjab was not paying subsidy, while KP was doing it over the minimum supply price.