LAHORE, Nov 6: The federal government is considering importing up to one million tons of wheat for meeting the expected crunch in the first quarter of the next year.

Sources in the Food, Agriculture and Livestock Ministry revealed on Thursday that the government was compelled to consider this option for a number of reasons. At the Wheat Disposal Committee meeting on Nov 3, Sindh requested to be provided 300,000 tons of wheat from federal reserves. A request from the NWFP for 200,000 tons was already lying with the government.

In addition to the above-mentioned requests, hoarding in the private sector has overturned all official estimates, the sources say. The government was comfortable with the demand-supply situation till the leakage of a summary regarding the increase in support price. The reported heavy increase in price encouraged the private sector to hoard wheat for six more months and reap windfall profits, pushing up the flour price to an unprecedented level. The public sector, on the other hand, had barely enough stocks to feed the country. There were not enough stocks to wipe off the hoarding effects by flooding the market and bringing the prices down, the sources claimed.

For breaking this psychological barrier that has held the market hostage, the government has decided to weigh the option of import and stabilize the local market.

In a recent letter to the federal government, the Pakistan Flour Mills Association (PFMA) has requested an import of at least 500,000 tons for arresting the increasing price of flour. On Thursday, Bilal Sufi of the PFMA told Dawn that the request was based on best interests of the consumer. Wheat price in the private sector has shot up to Rs400 per 40kg. Unless the government was in a position to meet the requirement from its own stocks, it could not hold the price even at this unprecedented level. It has to import wheat to break the hoarding cycle and bring the price down.

An official of the Punjab Food Department claimed that the decision to import wheat had already been taken in principle. The next meeting of the Economic Coordination Committee would only order the import.

Commenting on the wheat situation, he said the department had sufficient stocks to feed the province, but the trouble stemmed from the fact that over 3,000 tons of wheat and flour were going daily to the NWFP out of a release of over 13,000 tons. Since there is an inter-provincial ban on wheat movement, the trend cannot be stopped.

This trend would worsen in December when the private sector goes dry and a heavy portion of the release goes to other provinces. The province may not be able to meet demands of the whole country and this is the situation the government is preparing for, by ordering imports.

An official of the PFMA was of the opinion that there was every possibility that the entire import would not be consumed and a heavy chunk of it would be carried forward to the next year. The country still has sufficient wheat to feed its population, but it does not have stocks to deal with hoarders. The government is being forced to order imports for dealing with an artificial crisis rather than any real crunch.

The AJK government has still not lifted its allocation of 200,000 tons lying with PASSCO, neither have the defence forces who have the same quantity with the same agency. If both these allocations remain with the government, it would see the season off comfortably. But again, hoarding remains the problem number one with the government, he said.