ISLAMABAD: The federal government has estimated total domestic requirement of wheat at 29 million Metric tons for the year 2021-22 on the basis of country’s population of 232 million.
This was disclosed by Secretary Ministry of National Food Security and Research, Ghufran Memon at a meeting of National Assembly Standing Committee on Commerce, presided over by Syed Naveed Qamar.
“I have projected wheat consumption of 29 million tons in 2021-22 for 232 million people with two per cent growth in population on the basis of population census of 2017,” said secretary MoNFS&R.
At this Syed Naveed Qamar remarked “it means you also have no trust in census conducted in 2017 like us.”
The wheat consumption requirement is based on 115 kg per person per year.
Memon informed the committee that the key issue was minimum support price of wheat. Initially, the government fixed support price of wheat at Rs 1600/40kg, which has been revised upward to Rs 1800/40kg.
According to secretary MoNFS&R, he placed the issue of support price vis-a-vis import price of wheat: “I made a point before the Prime Minister that I am giving Rs 2000 or Rs 1800/40 kg to Russian wheat producer but my own farmer is getting Rs 1650/40. After deliberations, support price was increased to Rs 1800/40 kg.”
Memon stated that the question is if Rs 1800/ 40kg is the right price or should it be Rs 2000/40kg?
He said the Chicago price of wheat is Rs 1700-1750/40 kg and in dollars its FOB price is $ 240/40 kg at Karachi and if freight is included, it is $ 280/40kg.
He said Passco has also distributed bardana to farmers in Sindh, and one would hope Passco will also purchase wheat from Sindh. The provincial government has already announced Rs 2000/40kg however deals were struck at Rs 1700, Rs 1800 and Rs 2100/40 kg which averages at Rs 1800.
He informed the committee that he also met with Chief Minister Sindh, Murad Ali Shah on behalf of federal government and requested him to revise wheat support price downward - from Rs 2000 to 1800/40 kg but he replied that it was a cabinet decision.
Passco has to procure 3.5 million tons of wheat from Punjab. The total production of wheat in Punjab is expected to be 20 million tons. When wheat from Punjab will reach the market of Sindh, obviously there would be a correction in the market.
Last year, wheat production was 25.5 million tons whereas target of 26 million tons has been fixed for 2021-22.
In Sindh, production will be around 4.6 million tons whereas Sindh government’s procurement capacity is only 1.2 million tons.
In reply to a question on smuggling of wheat to Afghanistan, he said that since Pakistan has fixed minimum support price of 1800/40 kg, Afghanistan can import wheat from Central Asian Republics (CARs) at comparatively lower price which implies possibility of smuggling is negligible.
The government has reserved 1.2 million of wheat as seed for next year, 300 MT for feed and one million ton strategic reserves with 20 silos of 50,000 MT each to store wheat.
Chairman Standing Committee raised questions on the price of imported wheat, its timing, need and impact on prices of local wheat.
Memon said that initially there were different figures for shortfall, like 2 million tons and 4 million tons. However, later on there was agreement on 3 million tons.
He informed the committee that Pakistan will import 3 million tons of wheat through TCP and also on Government to Government (G2G) basis. For this purpose, deliberations are underway with Russia, Germany and Australia. The quantity and price of between $ 220 and 250 /40 kg will be locked now and delivery will be staggered for the whole year starting from August 2021.
“As I get the minutes of the Cabinet meeting which ratified the decision of Cabinet on April 13, 2021, I will write to Secretary Commerce to immediately start process for import of one million ton,” he maintained.
Cotton:
Secretary MoNFS&R informed the committee that the situation of cotton in Pakistan is not good and the country is facing a shortfall of 6 million cotton bales against annual demand of 12 million bales.
“Cotton Assessment Committee gave the output figure of 7.2 million bales in December but as Chairman of the Committee I disagreed with the figure with the technical people and insisted on a shortfall of around 6 million tons. The shortfall estimate of ginners is 5.6 million bales,” he said adding that the proposal of minimum support price for cotton has not been approved by the Cabinet. Cotton Secretary further said that Minister for NFS&R, Syed Fakhar Imam has directed the Ministry to restart proposing a minimum support price of cotton.
He said there are different minds in the cabinet due to which the proposal of minimum support price has not been approved.
The Ministry is criticized for not spending on research. For the last ten years, Ministry is seeking Rs 100 million for R&D but Rs 18 million was allocated which covers only salaries of employees.
Secretary further revealed that a project is also being launched to increase cotton production. The ECC has allowed duty free import of cotton in a way that it should neither hurt local industry nor other stakeholders.
Secretary Commerce Sualeh Ahamd Faruqi noted that share of cotton in the international market is still 72 percent whereas share of synthetic is 28 percent.
He said cotton shortfall is around 6 million tons and ECC initially approved import of cotton and cotton yarn till June 2021, however, the country will continue to face shortfall next year.
“We don’t want to give any extended signal to the market but import will continue next year,” he maintained.
Member Committee, Javed Ali Shah stated that India has reached BT 4 and USA BT 6 whereas Pakistan is still on category 1. He said there is no control on pesticides.
Member Committee, Shaista Pervaiz Malik raised the issue of duty on polyester fibre to protect just one factory.
Secretary Commerce informed the committee that this issue will be placed before the National Tariff Committee which will make its recommendations for the next budget. The committee will also look at the impact of anti-dumping duty on local industry.
Copyright Business Recorder, 2021
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