ISLAMABAD: Amid reports of shortage and rising prices, the Economic Coordination Committee (ECC) of the cabinet on Monday decided to beef up wheat stocks by ordering three million tonnes of imports and at least 1.5m tonnes of domestic procurement by the public sector.

A meeting of the ECC, presided over by Finance Minister Miftah Ismail, also decided to reduce the prices of wheat, sugar and vegetable oil/ghee at the outlets of Utility Stores Corporation for two months.

The Ministry of National Food Security and Research (MNFSR) has come up with two separate summaries on import and additional procurement of local wheat to build strategic reserves for stabilising the local wheat market.

In its first summary, the MNFSR reported that the Pakistan Agricultural Storage and Services Corporation (Passco) and the Punjab government had met their wheat procurement targets of 1.20m tonnes and 4m tonnes, respectively.

Three million tonnes of imports, 1.5m tonnes of domestic procurement by public sector ordered

At a recent meeting, the prime minister had ordered that a case be taken to the ECC for procurement of additional quantities of 0.5m tonnes and 1m tonnes by Passco and Punjab, respectively, along with additional cash credit limit (CCL).

The ECC thus stamped the prime minister’s directives and asked Passco to procure an additional quantity of 0.50m tonnes with the CCL of Rs28.50 billion and the Punjab food department to procure an additional quantity of 1m tonnes with the CCL of Rs145.50bn “in the wake of low production of wheat in the country due to previous government’s failure to provide fertilisers to the growers on time”, said an official statement.

Mr Ismail said the Sindh government would be asked to procure additional quantity of wheat once it met the current procurement target.

The previous ECC meeting had on March 17 set the wheat procurement target of 6.9m tonnes at a total cost of Rs376bn. The biggest target of 4m tonnes was given to Punjab with Rs229bn CCL, followed by 1.4m tonnes to Sindh with Rs77bn CCL and Passco’s 1.2m tonnes with Rs72.5bn and Balochistan to procure 0.1m tonnes at Rs6.2bn CCL. Khyber Pakhtunkhwa was given a target of 0.2m tonnes through its own fiscal resources.

In another summary, the MNFSR had demanded approval of duty and tax free import of 3m tonnes of wheat, including 2m tonnes on a government-to-government (G2G) basis from Russia and 1m tonnes through an international competitive tender. It had also suggested that in case of difficulties in arranging wheat from Russia on a G2G basis because of sanctions or otherwise, the entire 3m tonnes quantity should be arranged through international tenders with following procurement rules as already given exemption by the cabinet.

Keeping in view the current world scenario, its effects on the world economy and the demand-supply situation of wheat in the country, the ECC allowed 3m tonnes of import on a need basis, depending on the demand of Passco and the provincial governments to build up strategic reserves and to stabilise wheat prices in the country. The ECC directed the authorities concerned to frame modalities for financing and procurement.

The ECC also approved revision of prices of atta and sugar from Rs950 per 20kg to Rs800 and Rs85 per kg to Rs70, respectively. It also approved continuation of Rs190 per kg discount on vegetable ghee.

The meeting was informed that cushion in the unspent subsidy already approved by the USC was still available which needed to be disbursed by the finance ministry along with continuation of subsidised prices of these three items which were set for Ramazan and required fresh approval for two months i.e. until June 30.

Published in Dawn, May 10th, 2022