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September 19, 2020

Laggard wheat imports feared to trigger shortage in 4 months


September 19, 2020

LAHORE: Slow wheat imports couldn’t catch up to the burgeoning demand and supply gap of the staple anticipated in the three to four months, it was learnt on Friday.

Wheat stocks are depleting fast, igniting fear of widening gap in the country in general and in the Punjab in particular.

Currently, there is a gap of 2.1 million tons of wheat in the Punjab alone if compared with the last year’s stock position. The centre and the provinces are grappling with the challenge to meet the huge gap through imports. However, the import and trade process is too slow.

A spokesman of ministry of food security and research said as many as 260,000 tons of wheat has already been imported, while similar quantity is expected to arrive in two to three weeks.

“The federal government is keenly observing the wheat availability situation and taking steps accordingly,” he told The News.

Sources said there are two problems: slow imports and high import price. Basic dynamics of domestic wheat market may not change even if imports are accelerated in coming days, they said.

In Punjab, wheat flour supplies are shrinking with every passing day as government is hell-bent on maintaining quota of flour mills at the initial level of 17,000 tons daily despite the lapse of wheat issuance policy by over two weeks with open grain market almost becoming dryer, according to the sources.

“In these circumstances, the herculean task is to meet demand of grain by utilising government stock and will certainly fail if Punjab falls short of importing wheat in the shortest possible time,” said a source.

The statistics of wheat demand and supply also present a bitter picture about the daunting task ahead of food managers in the run-up to April in the biggest province by population of the country.

Presently, Punjab Food Department’s stocks stand at just about 2.9 million tons. Private wheat stocks available with flour mills are less than 100,000 tons. Last year, verified private wheat stocks with flour mills were about 1.1 million tons. If the volume is added with one million tons less grains available with the provincial food department against its last year’s stock, the total gap happens to be about 2.1 million tons.

In a recent conversation, provincial secretary food was, however, found optimistic about meeting wheat requirement of the province till March next year with available government stocks. However, this assertion may not be a good bet as it is based on present quantum of releases, which obviously need to be enhanced gradually, sources contended.

The demand of daily wheat quota by flour mills is already there and government may end up with more than doubling the present daily releases in early next year.

“In the prevalent circumstances, it is a million dollar question as from where provincial food department is going to meet this shortfall,” said a source.

The provincial food department on Friday decided to establish 50 sale points in Lahore where trucks of flour mills would directly sell flour to public.

Such steps may improve supplies and suppress some of the demand as people will have sigh of relief after seeing availability of flour in the city. But, again this will not be a permanent solution and the provincial government needs to enhance its stocks on urgent bases come what may.

Such an intervention will help ease availability of grains. However, the government needs huge money to make imported wheat affordable for public.

Wheat price in the province’s open market has already soared to Rs2,400 per 40 kilograms despite the official rate was fixed at Rs1,475. Government departments need to sit down to narrow this huge price difference to make functioning of grain market smooth. Otherwise, consumers will continue to suffer.