Coordination Committee of the
Cabinet is likely to meet shortly to decide its wheat import plan
By AMANULLAH BASHAR
August 02 - 08, 1999
The Wheat Coordination Committee of the Cabinet is likely to meet
shortly to decide its wheat import plan which is likely to be in the region of 3-3.5
million tonnes for the current financial year, said an active players in the commodity
The Federal Government has so far come with its plans to import 100,000
tonnes of wheat worth $13 million from the United States on credit under PL-480 programme
as a part of its wheat import policy.
The agreement for import of wheat from US was signed on July 27, 1999
in Islamabad and the shipment is likely to call on Port Qasim sometimes in coming
September. The sale proceeds of imported wheat will be used by the government to support
on-going reforms in agriculture sector to enhance food security and to encourage broad
based equitable and sustainable development.
Originally the US loan under PL-480 was meant for the import of 35,000
tonnes of soyabean seed for local solvent industry. However, the government decided to
import wheat instead of soyabean seed following reports of shorter than targeted wheat
According to official figures, the size of the wheat crop has so far
been estimated at 18.2 million tonnes which is likely to touch the figures of 18.5 million
tonnes as reports from certain areas in the province of Punjab where harvesting was still
going on, has yet to arrive. A comprehensive plan for import of wheat may be chalked out
by the government in the light of the exact assessment of the crop. Roughly speaking the
total wheat consumption in Pakistan is estimated at around 21-22 million tonnes a year. If
the wheat production figure of 18.5 million tonnes is taken as into consideration,
Pakistan will be required to import around 3.5 million tonnes of wheat this year. The
government had imported around 2.2 million tonnes of wheat last year while the private
sector imported 1.1 million tonnes. About three million tonnes of wheat worth $373 million
was imported in 1998-99.
In order to make Pakistan sufficient in wheat production, the market
players as well as millers are of the view that the official support price of wheat should
be announced between Rs300-320 per maund as early as possible to induce the farmers to
plan for a better crop.
currently, the official support price of wheat is Rs240 per maund and
issue price for the flour mills is Rs750 for a 100 kg bag of flour.
Current price of locally produced and imported Turkish and Australian
wheat is ranging between Rs750 to Rs780 per 100 kg. Flour prices now range between
Rs.8.per kg to Rs11 at retail stage.
The price of 40kg bag of flour at wholesale stage is, however, varying
at different centres of the country. It was selling at Rs293.60 at Lahore, Rs349.60 at
Peshawar, Rs456.40 at Quetta and Rs299 at Rawalpindi. Its is said that increasing prices
of flour in Peshawar and Quetta centres is because of inadequate supply of wheat.
Active players in commodity market are sitting with their fingers
crossed about government's programme to import of wheat for the current financial year. A
stock of 5 million tonnes of wheat, however, has been procured out of the current season
by the government's wheat procurement system.
Apart from composed posture of the official quarters over wheat
situation, market sources anticipating a gradual price hike of wheat if the import
schedule was not announced immediately.
Despite a clear cut note of warning, sounded by the provincial
government of Sindh, the wheat dealers taking advantage of the situation law and eruption
of violence in some parts of Karachi have started selling flour at Rs 11 per kg in
violation of the fixed price of Rs 8.25 per kg. The retailers, however, attributing the
increase to what they called short supply of wheat. Official sources, have claimed that
wheat is abundantly available and supplies to wheat millers have already been ensured to
According to an official version, over 700 flour mills are operating in
the country which were more than the actual need of the country. However, the entire
produce of these mills consumed because a sizable amount of flour is smuggled out of the
country into neighbouring Iran and Afghanistan.
According to reports, the wheat crop in Iran and some Central Asian
States was reportedly bad this year which means that there were greater possibility of
increased smuggling of wheat to these countries this year. Under these circumstances it
would not be wise to put any restrictions on new flour mills in Pakistan. Instead of
placing restriction on setting up new flour mills, their products should be utilized more
productively by exporting wheat or flour through official channels by taking strong
The Economic Coordination Committee (ECC) of the Cabinet, has asked the
State Bank of Pakistan to issue directives to all commercial banks not to provide
financial assistance for new flour mills in future.