June 1, 2004

 

 

Pakistan May Import Wheat Directly
 

The Sindh government plans to import wheat directly in case the Pakistani federal government fails to provide subsidy on 800,000 tonnes of wheat - to be imported by the Trading Corporation of Pakistan (TCP) - to meet its demand.

 

Arif Mustafa Jatoi, Sindh Minister for Food and Agriculture told The News on Monday that a summary pertaining to the demand of 1.0 million tonnes of wheat had been sent to the Prime Minister's secretariat.

 

"We expect at least 800,000 tonnes from the proposed 1.0 million tonnes of imported wheat," he said.

 

The minister added that in case the federal government failed to provide subsidy to Sindh on the imported wheat, the latter would seek permission for direct import.

 

"It is the responsibility of the federal government to provide us wheat to fulfill our strategic reserves. If they cannot give us the subsidy, then what is the TCP there for?" he questioned.

 

Sindh needs 1.2 million tonnes of wheat for its strategic reserves. It is behind the target by 1.0 million tonnes since the provincial food department succeeded in procuring only 200,000 tonnes.

 

Jatoi explained that it was not only Sindh which had failed in achieving its procurement target. Punjab, the only province with surplus wheat, too was lagging behind by 1.3 million tonnes. "The failure is not only at our end," he said.

 

He said Sindh was likely to follow in the footsteps of Punjab in banning the inter-provincial movement of wheat, to be implemented from the midnight of Monday and Tuesday.

 

Sindh apparently did not want to ban the movement of either wheat or wheat flour, but had no other option.

 

Despite the first-ever ban on wheat movement by Punjab and Sindh in the last five years, both provinces failed to achieve their wheat procurement target. The reason was attributed to hoarders purchasing wheat at extraordinary inflated prices directly from the growers after obtaining cheap loans from banks under commodity operations.

 

The total wheat stocks with Sindh remained at 181,769 tonnes until May 26, 2004, compared with 315,000 tonnes in the same period a year before. The newly procured wheat then was only worth 178,411 tonnes, with the procurement on May 26 recorded at only 261 tonnes.

 

Meanwhile, procurement by Pakistan Agricultural Storage and Supplies Corporation (PASSCO) had reached 757,000 tonnes by May 27, 2004, while Punjab had procured 2,175,000 tonnes against the target of 3.5 million, during that period.

 

On the other hand, the flour millers of Karachi have given the provincial food authorities a tough time by grinding only 25 per cent wheat of the purchases they had made against the grain purchase order.

 

Official sources told The News that the millers purchased almost 86,170 tonnes of wheat directly from the growers during four consecutive weeks.

 

"They have grinded only 25 per cent of the wheat from these purchases and the department is considering taking action against them in this regard," said the spokesman of the department. Traders in Sindh have predicted surge in flour prices in the days to come. Mohammad Ibrahim Bhutto, General Secretary, Ration Merchants Association Karachi predicted that if the ban on wheat movement turned out to be effective, prices would surge in Karachi since currently Punjab flour was available for Rs930 per 80 kg which the local millers were selling between Rs970 and Rs1,000 per 80kg bag.

 

The ban had not affected the market on Monday, as 2.5-quality flour was available for Rs1,000 per 80kg bag. Fine quality flour was being sold for Rs1,120 per 80kg bag and 'maida' for Rs1,230 per 80kg bag.

 

Retail prices for 2.5-quality, fine and 'maida' remained at Rs14, Rs15 and Rs16 per 80kg bag, respectively while chakky flour was available for Rs14 and Rs15 in the retail market.

 

Bhutto charged thirty flour mills of Karachi out of a total of seventy for selling wheat to other mills and not grinding the same.