Bids invited for import of 300,000 tons wheat

KARACHI: The government has invited bids for the import of 300,000 tons of wheat as the price of the staple continues to skyrocket in the country, it was learnt on Monday.

Trading Corporation of Pakistan (TCP) sought bids for the import of 300,000 tons of wheat as the country faces shortage of edible commodity and subsequent price escalation.

TCP, a state-owned commercial organisation working under the administrative control of the ministry of commerce, will open the bids on October 5.

Milling wheat should be of the latest crop, dried, mature grains of normal size, color and shape, according to the tender. It must be clean, wholesome and free from obnoxious smell, discoloration, admixture of deleterious substances. The wheat should be used for eating purposes in the country of origin and fit for human consumption purposes in the country of origin. The cargo should not be originated from Israel or any other country with which Pakistan has no diplomatic relation.

In the last bid, the lowest price offered was $280.90/ton – inclusive of cost and freight – for Russian wheat. The last wheat import tender was opened on September 23.

The lowest offer was said to have been submitted by Aston Trading House for 100,000 tons. Two other trading houses also took part in the tender, both offering 100,000 tons of optional-origin wheat. Agrocorp International was said to have offered $285.38/ton cost and freight, Reuters reported.

The government on September 17 scrapped a tender for the import of 150,000 tons of wheat after an unfounded allegation of collusion angered some members of a cabinet body.

Later, the Economic Coordination Committee of cabinet (ECC) decided that TCP would 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.

Owing to the increasing shortage and fewer supplies, prices of wheat and wheat flour have been constantly increasing. Wheat prices, which were at Rs1,500/40 kg in the market two years ago, have increased to Rs2,000/40 kg, a hike of 33.3 percent. Similarly, the wheat flour price, which was at Rs900/20 kg in August 2018, has increased to Rs1,400/20 kg, a surge of Rs500 or 55.5 percent within two years.

Prices of wheat/flour are different in different parts of the country, especially in Sindh and parts of Karachi.

In August, the ECC allowed the TCP to place an order for the import of 200,000 tons of wheat in the public sector following the import of 500,000 tons of wheat by the private sector in the country. It was expected that the arrival of imported wheat would help defuse price volatility, overcome shortage and discourage hoarding of the essential commodity in the country.