Punjab govt says 0.5mln tons wheat import not enough

LAHORE: Punjab government on Friday underscored a need of more wheat import than the recently allowed 500,000 tons to meet the domestic demand with the market estimating grain shortfall to reach two million tons this year.

Provincial minister Abdul Aleem recommendations in this connection have been forwarded for an approval. The provincial food department may import grains, he said, addressing a meeting at the chief secretary’s camp office.

Aleem said import of wheat would be needed to help meet requirements of northern Punjab and other provinces. “Wheat import is necessary to stabilise prices in the market and create competitive and healthy environment in the market.”

The federal government recently placed orders to import 500,000 tons of wheat.

The minister said a new policy is being formulated for the procurement of wheat to reduce the financial burden on the public exchequer.

“The new policy is aimed at providing targeted subsidy and getting rid of heavy bank loans.”

Aleem said the new recommendations on wheat procurement would be submitted to the Punjab cabinet for final approval so that the structure of the food department could be transformed into modern lines in the province. “Under the policy, wheat will be procured at the government level only for a limited stock while flour mills will be allowed to procure wheat themselves through the open market,” he said.

Aleem said farmers in the Punjab have received the best return for their labour this year and the government ensured purchase of wheat at good prices. “Flour prices have risen due to better prices of wheat to farmers. The government’s entire focus is on stabilising these prices in the market, for which an integrated strategy is being worked out.”

Two different models for procurement of wheat at the government level were discussed in the meeting. The meeting was informed that the Punjab currently had 4.3 million metric tons of wheat at the government level and there is no danger of shortage.

Rauf Mukhtar, provincial chairman of Pakistan Flour Mills Association said a shortfall of up to two million of wheat is expected this year.

“Public and private sector should be allowed to import one million tons of wheat each,” Mukhtar said. “As government did not allow flour mills to purchase grains from the farmers, mills have almost zero stocks of wheat right now. The food department should start releasing wheat to mills from government warehouses to keep prices stable.”

Last year, Mukhtar recalled, the provincial food department had 1.4 million tons of carryover stock, while Khyber Pakhtunkhwa and Sindh also had wheat at the onset of season, besides there were considerable reserves with the private sector.

“This year only public sector has stocks of wheat,” he said. “The private sector in this scenario is totally dependent on the food department.

Food officials were alleged to have seized wheat consignments in greater quantities, which pushed wheat prices to a historically high level in the open market.

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