Private sector allowed to import wheat

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has allowed private sector to import 0.8 Million Metric Tons (MMTs) of wheat without subsidy and at a comparatively lower price than the wheat imported recently by Trading Corporation of Pakistan (TCP), sources close to Minister for National Food Security and Research told Business Recorder.

Sharing the details, sources said, the ECC, on November 7, 2018, had approved to maintain 1.00 MMT of wheat strategic reserves by the Pakistan Agricultural Storage and Services Corporation (PASSCO), including a quantity of 0.080 MMT on account of SAARC Food Bank.

Subsequently, in the meeting of the National Price Monitoring Committee (NPMC) held on May3, 2021 under the chairmanship of the then Minister for Finance and Revenue, the quantum of wheat strategic reserves was enhanced to 2.00 MMT, in order to mitigate any disaster and to stabilize wheat prices in the local market. Therefore, to mitigate the shortfall, the ECC on May 9, 2022 allowed TCP to import 3 MMT of wheat (02 MMT through G2G and 01 MMT through open international tendering process).

In compliance with the direction of the Prime Minister’s Office and decision of the Federal Cabinet on July 15, 2022, a Committee of the Cabinet was constituted, comprising Minister for National Food Security & Research, Minister for Finance and Revenue and Minister for Commerce, SAPM to Kashmir & GB and SAPM to Establishment to re-ascertain the actual wheat requirement of the country.

ECC decides to boost strategic reserves of wheat

A consultative meeting of the Committee was convened on July 15, 2022, wherein it was decided that in the wake of rising prices of wheat in the global market, re-verified public wheat stocks and anticipated carry-forward stocks, the quantum of strategic reserves would be reduced to 01 MMT from the earlier decision of 02 MMT. Therefore, total import of wheat was decided to be 1.6 MMT.

In light of the decisions made by the Committee, a summary for the ECC of the Cabinet was moved by the MNFS&R on July 25, 2022 with the proposal to decrease the quantum of strategic reserves to 01 MMT. TCP had till then booked import of 0.986 MMT of milling wheat through international tendering process. However, G2G offer of Russia was not approved due to high prices offered.

Ministry of National Food Security and Research noted that PASSCO and Provincial Food Departments had reported public wheat stocks for the year 2022-23 at 11.10 MMT, including imports of 0.986 MMT awarded by the TCP. After commitments and distribution of 10.10 MMT among recipients, there would be carry-forward stock of 0.995 MMT. It was noted that this quantity was insufficient in the wake of recent rainfall, damage caused by the recent floods and the ensuing financial issues of the farmers for the next wheat sowing season, rising local wheat prices and hoarding and smuggling issues.

In order to ensure wheat availability across the border and to stabilize local wheat prices, the Ministry proposed that the quantum of wheat strategic reserves may be retained at the level of 02 MMT.

During the ensuing discussion, the Finance Minister/ Chairman ECC proposed to encourage the private sector for purchase of wheat from the international market.

The Ministry of National Food Security & Research stated that the wheat purchased by the private sector could not form a part of the strategic reserves, which was being maintained by the federal government. The Finance Division suggested that instead of granting approval for import of 2 MMT of wheat, and the financial implications involved, the ECC may consider approving 1 MMT of wheat and the Ministry of National Food security & Research be instructed to submit a fresh summary for the purchase of another 01 MMT of wheat.

Copyright Business Recorder, 2022