LAHORE, April 27: Chief Minister Pervaiz Elahi will preside over a crucial meeting on Friday (today) to re-assess the wheat procurement situation and the target.

According to food department sources, they have planned to suggest an increase in the target — 2.5 to three million ton.

The sources said they would also try to convince the chief minister for putting up pressure on the federal government for an immediate imposition of import duty to correct the market aberration.

Both these steps, they said, were crucial to reverse the market trend which was depressing the wheat price with every passing day.

They said the procurement had stabilised the price a bit, but the limited procurement target was putting a speculative pressure on the price and keeping it below the official support price.

Precisely for this reason, procurement figures were multiplying at a breath-taking pace, they said and added that the department purchased 66,000 ton on Wednesday alone, taking the total tally to 173,000 ton in the first five days of the procurement drive.

It was largely because the department was the only active buyer in the market now. Almost the entire crop arrival was landing in its lap, as private buyers were watching the situation. The situation would continue till the provincial government raised the target and the federal government imposed the import duty, they said.

The sources said it was also a fact that every additional 100,000 ton wheat would mean additional loan of Rs1 billion and massive mark-up eating into the provincial Annual Development Plan (ADP). But, the CM was also aware of the political cost of wheat price tumbling further and farmers getting hurt in the process. The cost could be even horrendous in a potential election year, they said.

A flour miller from Lahore said the government hardly had any choice but to increase the procurement target.

“The mills are purchasing wheat from open market but only for daily grinding because there is no dearth of crop, and its price would most probably slide further. Though wheat does not lose its fiscal promise for millers even at a 10 per cent mark-up. But, they are waiting for price going down further.”

He said millers and other private buyers knew that the food department would soon run out of breath if the procurement target did not go up.

“With the present rate of wheat, the department is fighting a lost battle. It has to ensure support price without the support of ground realities.”

He said some private buyers were purchasing cheap wheat from market and selling it to the department at a higher price allegedly with the connivance of some of the officials.