April 12, 2012

Pakistan to start wheat procurement on April 20

While announcing its wheat procurement policy, the Punjab Food Department has said that it will start purchasing 3.5 million tonnes from April 20 directly from the farmers and will discourage the role of middlemen.

The provincial government has not imposed any restriction on free trade and movement of wheat within and outside the province.

Addressing a press briefing on Tuesday (Apr 10), Food Secretary Irfan Ali, along with Food Director Najam Shah, said the government had set wheat purchase price at PKR1,050 (US$11.58) per 40 kilogrammes with PKR7.5 (US$0.08) per 100 kilogrammes as delivery charges.

Farmers will be provided packing bags on first-come-first-served basis from April 15. Those who apply for the bags will be provided up to 200 jute bags or 400 polypropylene bags in the first 15 days of procurement.

However, in case of overcrowding, the limit may be reduced to accommodate more and more farmers having up to 12.5 acres of land. "Over 90% of growers fall in this category," Najam Shah said.

"We will start buying wheat through our 375 centres from April 20, but I fear that the date may be further extended up to April 25 due to weather conditions," Shah said. The drive will continue to June 7.

The Bank of Punjab will provide a loan of PKR92 billion (US$1.01 billion) to the food department for wheat purchase. "We are trying to create space at our storages. However, private space will also be rented to store maximum wheat in covered area," he said. At present, 997,000 tonnes are stored in open spaces while 892,000 tonnes are in covered area.

Shah said private buyers could also purchase wheat while exporters could buy the commodity under public-private partnership arrangement, which would stabilise prices in the open market. Talking about theft cases in the food department, he said they were trying to catch the culprits rather than going for recovery. "This has changed the situation."

He expressed the hope that flour prices might not increase in the near future due to fresh wheat procurement. "We will sit with the millers to solve the price dispute," he said.