The federal government would give Rs 164.798 billion bank guarantee on behalf of public sector for procurement of 6.57 million tons wheat in 2011 and left it up to the provinces to decide about keeping strategic reserves. An official said that decision to this effect was taken by the ECC of the Cabinet presided over by Finance Minister Dr Abdul Hafeez Sheikh here on Wednesday after extensive discussions on procurement of wheat as well as on keeping strategic reserves.
After receiving a detailed presentation on the required amount to the each province and Passco for procurement of wheat, the Economic Co-ordination Committee (ECC) agreed that federal government would arrange bank guarantee of Rs 164.798 billion for procurement of wheat subject to the availability of credit.
Of the total Rs 164.798 billion, Punjab government would require Rs 83.475 billion for procurement of 3.5 million tons wheat, Sindh wants Rs 30.333 billion to procure 1.3 million tons, Khyber Pakhtoonkhwa would need Rs 10.524 billion to buy 0.4 million tons of wheat in the rabbi season. Balochistan would require Rs 3.5 billion for procurement of 70,000 tons wheat. The ECC also decided that Passco would procure 1.3 million tons wheat.
The ECC also decided that Punjab and Passco will maintain one million tons strategic reserves of wheat proportionate to their procurement and left it up to the provinces to decide whether they want to maintain further wheat strategic reserves according to their capacity and needs. The meeting was informed that the total available stock of wheat with Punjab was 2.5 million tons and it needed to be disposed of to create a space for fresh wheat stock at public storage facilities.
The committee constituted for wheat issues under the Deputy Chairman Planning Commission submitted its report to the ECC with the recommendation that wheat export should continue and the government should not impose ban on it. The committee recommended that a cut-off date should also be announced for wheat export.
The ECC was informed that the country has enough stock of sugar to meet the sugar requirements till October including the holy month of Ramazan. It was also informed that private sector has also opened letter of credit for import of 87,000 tons sugar.
Trading Corporation of Pakistan representative also informed the ECC that some 0.1 million tons urea fertiliser has already arrived in the country and some 130,000 tons of urea would arrive on March 19 to meet Rabi crop requirements. The government has opened $100 million LC for import of fertiliser to meet domestic requirement. The ECC meeting decided that the FBR would notify new ex-factory price of sugar for assessment of GST.
The finance minister is reported to have inquired about the procedure of opening of the Letter of Credit for commodity imports and was not satisfied with the reply by the Trading Corporation of Pakistan and decided to take up the matter in the next ECC meeting. The ECC was informed that a consortium of 6 banks is providing services to TCP for opening LCs. Secretary Ports and Shipping was of the view that completion of Gwadar-Ratodero Road was critical to make the Gwadar Port financially viable.