Friday December 09, 2022

Pakistan needs to import up to 200,000tns wheat every month

May 28, 2020

LAHORE: Pakistan needs to import 100,000 to 200,000 tons of wheat every month till April next year to check price hike in the domestic market as local production is not sufficient to stabilise grain supplies, it was learnt on Wednesday.

A survey by The News found that strategic reserves or buffer stocks of one million tons are additionally required to control price rise, keeping in view the demand-supply gap.

An estimate says wheat production runs short of about one million tons and may be around 25.7 to 26 million tons this year. There is about 0.7 to 1.0 million tons less output in Punjab alone if compared with the provincial output target.

Secretary Food Punjab Waqas Mahmood agreed to the need of import as soon as possible.

“Wheat import should not be ruled out,” said Mahmood. “I’ve already asked the government (that) only 6 percent import duty has to be exempted and it shall be very competitive.”

Current international prices are somewhat within reach. Any move to import wheat would have an immediate positive impact on wheat prices in the local market, people familiar with the matter said.

The intended volume of wheat, as per federal government plan, is far too little to fill the gap.

A senior ex-official of the ministry of national food security and research called for import of wheat for meeting shortfall in the wheat production.

“At least one million tons of wheat needs to be imported and that too to cater initially Karachi and Hyderabad requirements,” said the official. “We must understand that shortage in these two huge cities creates stress all over the country.”

About import timing, he said it should be done from July /August onwards when the Black Sea wheat hits the market. “This will be the time when Pakistan’s requirement will start to rise and international price as seen historically will also be lowest.”

The former bureaucrat was not in favor of imports by public sector. “Instead, private sector should do it either openly or by quota to flour mills,” he added. “Punjab already moved import plan to federal government and ECC (Economic Coordination Committee) has kept the option of import open.”

Market insiders said timely imports are indispensable to fetch reasonable price in the international market as well as arresting upward trend in domestic market. There is a need to explore government-to-government deal with USA, Russia/Ukraine for import of about one million tons. Rest should be done through private sector but in a time bound manner, they said.

Majid Abdullah, central leader of Progressive Group of Flour Mills said there is a revised production estimate of 19 million tons plus in Punjab, while there is about 30 percent or 5.7 million tons or so marketable surplus this year.

“Let’s say this year due to soaring prices, this quantity will be as high as six million tons out of which Punjab buy around four million tons and Pakistan Agricultural Storage and Supplies Corporation procures about one million. Hence, maximum one million ton may be still in the open market, waiting for buyers,” said Abdullah. “This year, may be it is close to half a million tons due to various factors.”

Abdullah said import of wheat is an indispensable option in the given circumstances. At least 0.5 million tons should be imported. “However, price for flour mills must not be relatively lower and be comparable with the price prevalent in the international market.”

Muhammad Yousaf, president of Lahore Atta Dealers Association said wheat has been in short supply this year. “We should import as much as 2.5 million tons of wheat to meet all our need in the next one year or so,” said Yousaf. “Not only production is less due to various factors, the public sector stocks are also not at satisfactory levels. So we should start import of wheat in order to meet shortfall.”