July-August wheat import surges by 1,610 percent

Wheat import has surged by 1,610 percent during the first two months of the current fiscal year in the wake of its huge shortage in the local market due to smuggling and hoarding. Market sources said that the previous government's ineffective policies have forced the country spend millions of dollars on wheat import to cope with flour crisis.
"Shaukat Aziz government allowed wheat export in December 2006, without getting the final production statistics of wheat production, which triggered a wheat crisis in the country," they added.
However, the negative impact of erroneous decision of wheat export is still being witnessed in the country, as it is continuously importing huge quantity of the commodity for local demand, they added.
While the smuggling of wheat and wheat flour into Afghanistan and massive hoarding in the country are some other major reasons behind the increasing import of the commodity.
Wheat import surged by 1610 percent during the first two months of FY09 to meet the local demand, they informed. With current surge, overall import stood at 90.184 million dollars (Rs 6.58 billion) during July-August of current fiscal year as compared to 5.272 million dollars (Rs 318 million) in same period of last fiscal year, depicting an increase of 84.912 million dollars during the first two months.
In terms of volume, overall wheat import during first two months reached 211,803 tonnes against the import of 11,000 tonnes in corresponding period of FY08, witnessing a rise of 1825 percent in July-August.
Similarly, month-on-month basis wheat import has increased by 100 percent to 59.939 million in August 2008, while during the same period of last fiscal year, there was no wheat import. The wheat is being imported through the Trading Corporation of Pakistan, which started wheat import operation in October last year and first consignment of imported wheat after the two years gap reached Karachi in the first week of December 2007. However, it is interesting that despite import of over 3 million tonnes, the country is facing shortage of wheat and the wheat flour price stood at peak level of Rs 35 per kg, market sources said.
The official statistics show that the government spent some 860.001 million-dollars on wheat import in FY08 as compared to 41.559 million dollars in FY07, depicting an increase of 818.441 million dollars during FY08.
The import on high rates also compelled the government to pay billions of rupees subsidy to stabilise the prices of wheat and wheat flour in the domestic market, as the government is importing wheat at Rs 30 per kg while it is being supplied at Rs 18 per kg to flourmills.