.

1- THE WHEAT SITUATION
2-
AUTO INDUSTRY
3-
EFFORTS FOR TACKLING CHILD LABOUR
4-
SIGNIFICANCE OF PUBLIC SECTOR POLICIES IN AGRICULTURE
5- IRAN-PAKISTAN GAS PIPELINE PROJECT

 

THE WHEAT SITUATION

.
The export of wheat has registered a tremendous increase during the last 5 years more than 14-fold in term of quantity and almost 12-fold in term of value

.

By SYED M. ASLAM
Dec 22 - 28, 2003
.

 

 

 

There are many who blame the ongoing wheat crisis nationwide, particularly in the province of Sindh, which has pushed the prices of wheat and the flour to unaffordable levels of Rs 16 per kilogram on the increasing flow of the commodity to neighbouring Afghanistan, legal or otherwise. If official figures are any indication, the export of wheat has registered a tremendous increase during the last 5 years- more than 14-fold in term of quantity and almost 12-fold in term of value during last three years alone.

Official figures also show that un-milled wheat exports has increased over 32-fold during 1998-99 to 1.137 metric tons in 2002-03 in term of quanlity and depicted a 93-fold increase from $1.388 million to $130 million during the same period. It also proves that not only that both the quantity and value of wheat exports registered a tremendous increase during the three years ended June 30 this year but also shows that the value of exports has registered an extremely in-proportionate increase.

Many say that not only the bulk of the official wheat exports went to the war-ravaged country but substantial quantities of the commodity is also increasingly finding its way into it due primarily to proximity and easy cross-border access. Many also attribute the ongoing crisis on smuggling substantial quantities of wheat to Afghanistan.

It is interesting to note that both the government and the flour mill-owners have been blaming each other for the crisis, the cost of which is being paid by the consumers in sharp increase in retail prices which touched unaffordable levels of Rs 16 per kilo in the first week of December. Prices of branded flour marketed by some 80 big flour mills jumped to Rs 13-14.50 per kilo recently while some 1,5000 small millers across the city who purchased the wheat from the open market were retailing at for Rs 16 per kilo. Earlier this month a 10 kilo bag of Ashrafi brand flour was retailing for Rs 140 while the same quantity bag of another brand A-One was retailing for Rs 125.

In just one day between the 1st and the 2nd of this month the price of 80 Kilgram bag of fine flour registered an increase of Rs 35 to Rs 1,130 per kilo. On the same day, the price of fine wheat flour registered a sharp increase of Rs 35 per 80 kilogram increasing to Rs 1,130 from Rs 1,095 two days earlier. The price of un-milled wheat in the open market also touched Rs 1,150 per 100 kilogram, or Rs 11.50 per kilo, way over the official rate of Rs 830-850 per 100 kilogram to the big flour mills two days later. While the big flour mills complained that they were not getting the required quota from the government, the commodity was easily available in the open market though at much higher prices. The easy availability of the commodity in the open market at much higher costs posed many valid questions the answers to none of were provided.

While the situation has been eased a bit ex-mill prices of wheat registered a declining trend when 80 kilogram bag of a branded flour went down by Rs 25 to Rs 1,100 on the 12th of this month over the previous day many say that the flow of wheat into neighbouring Afghanistan, as well as into Iran, through illegal channels would keep on destabilisng the situation in the months to come. However, it still remains far from satisfactory despite inching down of the retail prices of wheat flour recently. As mentioned in the earlier story it is time for the policy makers to take measures to overhaul the shady wheat distribution system, obvious from the postponing of the decision whether or not to import the commodity and if so just how much because the government itself did not have the exact information quantity of stocks lying with the private sector, to make time-critical decisions as and when needed.

 

 

Retailers also attributed incessant increase in prices of paper and plastic bags as other factor the ultimate impact of which is being passed off to consumers. For instance, the prices of 1,000 pieces of 5-kilo paper bags was increased from Rs 700 to Rs 800 last month. The price of 10-kilo paper bags also registered an increase of Rs 200 to Rs 1,650 per 1,000 during the same period. Similarly, the price of the good quality plastic bags were increased by almost 50 per cent from Rs 60 per kilo to Rs 95 per kilo during the Holy month of Ramazan. Retail millers said that the prices of paper bags routinely increased in winter and Ramazan, the two of which coincided this year, on the pretext that the low construction activities in winter are low thus resulting in shortage of cement paper bags while after the Eid the women making paper bags in Korangi routinely go on extended vacation because of increased marriage ceremonies. "The price increases have become a routine each year and it is ultimately passed down to the retail consumers."

Presence of numerous players at levels of the supply chain between farm-to-market-retail middlemen and the inaccurate and unreliable production forecasts as well as the stockpiling of hundreds of tons of the commodity ultimately resulting in huge rot are other important issues blamed for inadequate planning and storage of the commodity.

Table
Wheat exports during last 5 years

Year

Quantity (Metric ton)

Value ($ Million)

1998-99

4,000

1.388

1999-00

0000

0000

2000-01

80,498

11.005

2001-02

642,595

71.383

2002-03 1,136,953 129.606

Source: Export Promotion Bureau