Provinces asked to import wheat directly amid shortages

LAHORE: The government has asked provinces to make direct arrangement for wheat imports in another push to bridge the grain shortfall across the country, it was learnt on Monday.

Secretary to food security ministry said provinces might prefer to directly import the requisite quantity of wheat. Public sector might also consider releasing their subsidised wheat to create price equilibrium in the local market, he said in a letter to chief secretary Punjab.

A decision of the meeting of Economic Coordination Committee (ECC) of the cabinet in mid-July was also cited as a reference in the letter available with The News. Provincial governments, Pakistan Agricultural Storage and Services Corporation (PASSCO) and Trading Corporation of Pakistan (TCP) may arrange wheat imports as soon as possible to avoid shortages any time during the year, the ECC said then.

“Provincial governments, PASSCO and TCP may also immediately invite tenders/bids for import of wheat in order to meet wheat deficiency in the country,” the secretary said. Provinces desire to immediately convey their estimated demand of wheat, required till the next crop season for human consumption and replenish the released stocks. The immediate release of wheat out of the available stock is expected to stabilise wheat prices and ensure availability of wheat at affordable level.

The secretary said the government has taken immediate steps to mitigate the estimated total shortfall of around 1.5 million tons.

The provinces, therefore, have been asked to intimate wheat deficiency in respective federating unit in order to meet the shortfall and replenish the released stocks at the earliest, so that total quantum of wheat to be imported through TCP may be decided.

Insiders believe authorities would have to make strenuous efforts for bringing price of imported grains at affordable level. The present rates of wheat in international market are much higher than local prices. If such issues of price variation are not addressed timely, there will be no desirable response from importers, they said.

Giving details of arriving shipments and expected price of imported wheat, an insider said, as many as 25 private companies have so far finalised deal for import of 499,600 tons of wheat. Except a few traders from upcountry, most of these traders belong to port city of Karachi.

Among these deals, two mature contracts are reportedly destined for Pakistan and may reach between last week of August and first week of September this year. One vessel carrying 65,000 tons wheat and another with 60,000 tons will bring much needed grains in about a month.

The insider said wheat being imported from Ukraine would cost $235 per ton, which translates into Rs39,480 in local currency. After Rs3,100 port charges, the landed per ton price of wheat will be Rs42,580 or Rs1,703 per 40 kg at Karachi. By adding Rs100 upcountry freight, the price of imported wheat in Lahore would be Rs1,803 per 40 kg, which is way higher than the official release price of Rs1,475 being charged from the flour mills in exchange to government stocks.

The ECC, in the last meeting , directed the ministry of food security to accelerate efforts for wheat imports with view to ensure the availability of wheat and atta in the country throughout the year and on affordable price.

The ECC was told that the provincial governments and PASSCO achieved 79 percent of their procurement targets. More than 120 importers have so far shown interest to import wheat in the country.

ECC directed the ministry to extend requested facilitation to the importers, including waivers of different taxes and duties.