ECC orders ramped-up wheat imports as flour prices continue to spiral
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ISLAMABAD: Amid rising flour prices, the Economic Coordination Committee (ECC) on Wednesday expressed concern over failure of the relevant agencies and provinces to meet wheat procurement targets and streamline imports, further aggravating the supply situation and price hike.
The rising price of wheat was not on the meeting’s agenda but discussion took place around it nonetheless in light of the Prime Minister’s statement a day earlier calling for a crackdown on wheat hoarding.
The ECC meeting, presided over by Finance Adviser Dr Abdul Hafeez Shaikh, was told that the total procurement by the public sector including the provinces was 21 per cent short of about 8.8 million tonnes target whereas the imports were yet to begin. Khyber Pakhtunkhwa had procured about 19,000 tonnes against 100,000 tonnes target and its crop output was also not up to the mark.
Shaikh and other members of the meeting showed concern over the situation and wondered why the KP government failed to take things seriously when its crop output was on the lower side and should have proactively moved to ensure maximum procurement and lined up imports.
Non-implementation of committee decisions annoys finance adviser
It was also reported that a lot of the commodity and its products were being smuggled to Afghanistan and beyond because of higher international prices. The sense of the house was that the provincial government should get out of its unnecessary policy of over-reliance on wheat releases from Punjab.
People present at the meeting told Dawn that Shaikh was annoyed that “scandal after scandal keeps emerging because those responsible are sluggish in implementation” of collective decisions of the ECC and the cabinet. He also asked why the import permits had been issued in tranches of 500,000 when the ECC had clearly allowed limitless imports.
Ministry of National Food Security and Research (MNFSR) representatives said that notifications for import had been issued for 1.5m tonnes as per the summary it had moved to the ECC. More than 120 importers had so far shown interest to import wheat in the country, the ministry said.
However, Shaikh was displeased, asking why limits on imports were continuing to be applied when the ECC had removed these.
“In order to ensure the availability of wheat and flour in the country throughout the year and on affordable price, the ECC directed the MNFSR to accelerate efforts for wheat imports”, an official statement said.
It also directed the MNFSR to hold meeting with major wheat importers at the earliest and come up with proposals that may indicate the expected price of imported wheat and if there is any need for the government to allow subsidy to keep the prices stable in the domestic markets.
The ECC also directed the MNFSR to extend requested facilitation to importers including waivers of different taxes and duties and asked by the provincial governments, Trade Corporation of Pakistan and the Pakistan Agricultural Storage and Supplies Corporation to arrange wheat imports as soon as possible to avoid shortages any time during the year.
ADB to issue rupee linked bonds
The ECC also allowed the Asian Development Bank to issue offshore ‘Pakistan Rupee Linked Bonds’ for international investors subject to completion of all codal formalities. The programme, recommended by the State Bank of Pakistan (SBP), shall be restricted to maximum of $200m. The local currency proceeds of the bonds shall be used for financing long-term infrastructure and energy projects in the country.
The ECC also allowed the Finance Division to release Rs1 billion to the Sui Southern Gas Company Ltd for undertaking gas supply to localities/villages falling within 5km radius of gas fields in order to comply with the courts’ decisions.
The ECC allowed equity investment abroad amounting to Saudi riyal 22.5m by Eastern Products Ltd. On this occasion, the ECC also increased of limit for investments abroad (to be approved/allowed by the SBP) from $5m to $10m beyond which the permission will have to be sought from ECC.
For the implementation of the e-office program, the ECC directed Ministry of Information Technology and the Federal Investigation Authority (FIA) to withdraw complaints against LMKR as well as withdrawal of all inquiries by the FIA on LKMR projects subject to fulfillment of agreement clauses. The Ministry of Planning, Development and Special Initiatives was directed to activate the project on the request of National Information Technology Board and provide requisite funds to complete the work.
Five projects of different types of development works in North West Industrial Zone and South West Industrial Zone by Port Qasim Authority (PQA) with their own funds were approved by the ECC with the direction to the ministry and PQA to observe all the codal formalities for the completion of the projects.
The ECC did not take up policy measures and standard operating procedures for utilisation of domestic satellite facilities as the concerned ministries including the Ministry of Information Technology and Telecom did not turn up.
Published in Dawn, July 16th, 2020
