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January 20, 2020

Wheat to be imported to outsmart hoarders, profiteers

Top Story

January 20, 2020

ISLAMABAD: The federal government is going to import wheat to avert a full-blown crisis in the country although sufficient stocks are available.

In order to maintain the stocks at the minimum level of 0.2 million tons, the government is now going to decide to import 0.2 or 0.3 million tons of wheat probably from the Central Asian Republics (CARs) or Australia or any other part of the world with the approval of Economic Coordination Committee (ECC) of the Cabinet.

The measure is being taken to save the consumers from the blackmail of hoarders and profiteers if the strategic reserves of wheat are depleted.

The ECC is scheduled to meet on Monday (today) with Adviser to the PM on Finance Dr Abdul Hafeez Shaikh in the chair.

Top official sources confirmed to The News on Sunday that the Planning Commission high-ups had raised alarm bells and informed Prime Minister Imran Khan in official meetings held in September and October 2019 about a looming wheat, flour crisis in the country with probability to hit hard by January 2020. However, the government could not manage to avert this crisis, as it started from the Sindh province but now its spillover impact has already started affecting all other parts of the country.

The wheat production was projected at 25.195 million tons for the last fiscal year 2018-19 but its actual production remained less than 25 million tons in the range of 24.7 million tons. The wheat production stood at 25.076 million tons in 2017-18 and 26.674 million tons in 2016-17.

The wheat consumption requirement on monthlybasis in the whole country stood at 2 million tons so the overall production of around 24.7 million tons was sufficient for meeting all domestic requirements.

In addition, Punjab also possessed carryover stocks of wheat on account of last financial year. Punjab also procured around 3.5 million tons against the target of 4 million tons.

Initially, the crisis had started appearing when the Sindh province decided not to procure wheat because different officials were facing NAB probe on account of procurement of wheat and other investigation agencies, so they decided not to procure wheat last year.

First of all, the government took decision to export 200,000 to 400,000 tons of wheat keeping in view surplus stocks on the basis of estimates presented by Ministry of National Food Security and Research but the actual exports of wheat crossed 640,000 tons.

In one official meeting when the government had already slapped ban on export of wheat and flour, the PM was informed that the exports of Maida and Suji was still going on to Afghanistan and in this guise the wheat, flour exports was also underway.

Then the premier instructed ban on all wheat related commodities to Afghanistan. During these official meetings, the premier had instructed import of wheat to the tune of 0.2 million tons in last October 2019 but later on the decision could not be implemented well on time.

Meanwhile, Punjab had imposed a ban on inter-provincial movement of wheat. Keeping in view this whole situation, now profiteers and stockists started exploiting the situation and allegedly plunged into hoardings of wheat, flour in the country. The prices of wheat, flour had started escalating in different parts of the country since September/October last year and now it had become full fledged crisis in January 2020.

The next two months are quite important as the next crop of wheat would start coming in by March end in Sindh and by April end in the Punjab.

In order to maintain the strategic reserves at desired levels, the federal government is going to consider approval of import summary during the ECC meeting that is scheduled to meet on Monday (today) for granting formal approval to summary on this effect.

Under the devised mechanism, wheat will have to be provided to Sindh and KP through Passco otherwise this crisis could escalate shortages and prices in the domestic market.

When contacted, a top official of PTI-led government said the federal government could not be held responsible because it was the domain of the provinces to procure wheat, so if it was not done by Sindh province and its spillover impact negatively impacted others, how they could be the Centre held responsible for this artificial crisis.

Meanwhile, the government and opposition indulged in a blame game over the wheat shortage. The government held the Sindh government responsible saying its untimely purchasing of commodity and supply to flour mills caused the crisis. However, the Sindh government held the prime minister responsible for the situation.

The opposition Pakistan People’s Party and PML-N alleged that the government allowed the export of wheat despite a shortage in the reserves.

Opposition Leader in the National Assembly Shahbaz Sharif demanded an inquiry to determine who had authorised the move.

Meanwhile, bakers in Khyber Pakhtunkhwa said they will be going on a strike on Monday (today) against the government.

Various bakers’ associations in the Punjab have given a five-day ultimatum to the government demanding that either they should be supplied flour at the previous rate or allow to raise the prices of roti and naan.

Special Assistant to the Prime Minister on Information and Broadcasting Dr Firdous Ashiq Awan blamed the Sindh government for the wheat shortage in the province and said the federal government had nothing to do with the crisis.

Addressing a press conference in Sialkot, she said after the Sindh government's failure in timely purchase of flour, the federal government had supplied 400,000 ton wheat to Sindh from its strategic reserves on the directives of prime minister.

"From the total wheat allocated, the Sindh government has only taken 100,000 ton wheat. This goes to show that shortage of wheat in Sindh, and the subsequent increase in the price of the commodity, is due to an issue in the supply.

"The Sindh government has failed to ensure that the wheat is supplied to mills in the province. Due to this, flour mills are not working to their full capacity and there has been a sharp increase in flour prices.”

She urged the Sindh government to expedite the supply chain and provide flour to the mills so that prices can be reduced.

She explained that the "mafia", angered by the government's crackdown on real estate, has now taken to the markets to turn their ill-gotten gains into profit by buying and hoarding essential commodities.

"They are using their 'black money' to buy flour, lentils, rice and other essentials from the market and creating a shortage so that they are able to sell these items at exorbitant rates."

Asked when exactly the people of Pakistan will finally be given relief, Awan said, "You have to see who is responsible for the hike in prices. Is it a government which has been in power for only 15 months? Is this the government which was responsible for the devaluation of the rupee?"

"During the past 15 months, we have tried our best to prevent the economy from sinking under." Listing the initiatives taken by the Pakistan Tehreek-i-Insaf (PTI) government to facilitate the underprivileged segments of society, Awan said the reforms taken by the ruling party were difficult decisions but a necessary evil.

"Leaders are able to make unpopular decisions as they are making them for the country and not for the sake of political gains," she concluded.

Minister for National Food Security and Research Khusro Bakhtiar said the Sindh government had failed to procure even a single grain of wheat this year despite having a target of 700,000 tonnes.

He said the citizens of Sindh were as dear as any other in the country and the federal government will assume responsibility for their care.

Bakhtiar said the federal government had provided 400,000 tonnes to Sindh, especially for Karachi and Hyderabad, but only 100,028 tonnes had been picked up.

He said he had spoken to the food department secretary and assured him that if additional wheat was required, Pakistan Agricultural Storage and Services Corporation (Passco) had committed to providing 50,000 to 100,000 tonnes more.

The minister expressed the hope that beginning tomorrow, consumers should witness a decline in wheat and flour prices. Meanwhile, at a press conference in Karachi, PTI Sindh President Haleem Adil Sheikh said shortage of wheat and the hike in prices have to be controlled by the Sindh government and their officials.

“There should be an inquiry. Bilawal sahib, either you or one of your people need to give us answer as to how the provincial food department is in debt to the tune of Rs90 billion.

"Secondly, please tell us where 0.4 million tonnes of wheat from a total of 0.8 million tonnes have gone?” He maintained that in light of the situation, the federal government was in the process of sending 10,000 tonnes of wheat to Karachi and Hyderabad through NLC [National Logistics Cell]."

He added that currently, there were at least one million tonnes of wheat in the province, including the province's own reserves, the wheat given by the federal government and the wheat brought in through duty-free imports.

"Now it is the Sindh government's responsibility to ensure supply to the mills and to reduce flour prices," he said.

"The blame for this entire situation does not lie with the prime minister, it lies with the Sindh government's incompetence and negligence." Brandishing copies of new reports highlighting the alleged corruption of the Sindh government, Leader of the Opposition in Sindh Assembly Firdous Shamim Naqvi said it was painfully clear who was the responsible party in the issue.

"Why is flour being sold for Rs80 across Sindh? Each MNA owns one or two mills. They are all partners [in crime]." He added that the Sindh government should take steps on an emergency basis to reduce the price of flour to Rs40 within three days.

Sindh CM's response On the other hand, Sindh Chief Minister Murad Ali Shah said wheat shortage in the province will be brought under control by Tuesday or Wednesday.

In a statement, the CM said, "The Pakistan Agricultural Storage and Services Corporation (Passco) have given 300,000 tonnes of wheat to Sindh which will be brought in from Punjab and Balochistan."

He added that delay in transporting the wheat had been caused by the transporters' strike. "At least 70,000 bags of wheat have reached Karachi today. By tomorrow, an additional 50,000 bags will also be delivered."

Meanwhile, Sindh Information Minister Saeed Ghani, in response to Awan and Naqvi's statements demanded that the prime minister appear on television and apologise to the nation for the shortage.

He held the premier responsible for the wheat shortage in Sindh as well as the rest of the country.

"Is the Sindh government also responsible for the shortage in Punjab?" he pointed out.

He claimed that wheat from Punjab had been sent to KP and a shortage was intentionally created in Punjab. "The PTI government is playing a dirty game by blaming Sindh."

Ghani criticised the federal government for being occupied with blaming Sindh while there are queues lined up in Lahore, Peshawar and Quetta of people seeking to obtain wheat.

"The PTI government cannot put up this act for much longer where it blames others to hide its own incompetence," said the minister.

Shahbaz Sharif, on the other hand, demanded an inquiry into who had authorised export of wheat.

"When there was an internal shortage, why was wheat and flour sent abroad?" he asked. He demanded that answers be provided to the nation for who was behind this act and at what price was it sold.

"The nation must know who benefitted from having caused such harm to the country." He asked what had happened to the wheat reserves in the past 16 months and why wheat was exported if the reserves were running low.

According to Shahbaz, while the government was touting 2020 as a year of progress, economic experts are declaring it a year of economic devastation. "If Imran Khan is unaware, then he is incompetent, and if all is at his behest, then he is the ringleader of corrupt elements,” he said.

A day earlier, PPP chairman Bilawal Bhutto Zardari had alleged that the federal government had sent 40,000 metric tonnes of wheat to Afghanistan, and thus, intentionally had created a wheat crisis.

Claiming that the government had a lot of wheat that was not being supplied to the people, he alleged that the PM had perhaps created this crisis to benefit his cronies.