Wheat estimates a guess work

Published February 28, 2008

KARACHI, Feb 27: There are doubts on wheat crop estimates this season mainly because of reduction in sowing area, drastic fall in phosphate fertiliser consumption and finally a change for worse in weather conditions in Sindh early last week when temperature fell down. A harvest of government target of 24 million tons is ruled out completely, market analysts and traders estimate 21 million tons output.

An unending row between sugarcane growers and millers on price issue delayed the harvest and hence wheat sowing was put off. The sowing area is said to be three to four per cent less than projected. As the government withdrew subsidy on phosphate fertiliser, the farmers found it difficult to invest much and field reports say a drop of 25 per cent in consumption.

Early last week, a big part of Sindh that included wheat growing areas came under thick cloud of dust. An abrupt dry cool weather is said to have damaged the crop.

As if all these factors were not enough to adversely impact on wheat crop, the caretaker government announced a support price of Rs510 for 40 kilograms when wheat is being sold in open market at Rs640 to Rs650 for same quantity. “In India, the official procurement price is Rs640 for 40 kilograms,” a local trader informed on the basis of news he got from the Internet.

Sindh government is expected to begin its wheat procurement from middle of March while the Punjab government is expected to resume it from April. The government agencies are being given a task to build up a reserve stock of five million tons through procurement from the farmers.

Officials expect fresh guidelines from the political governments at the federal and provincial levels after their expected induction by first week of March. They hope that all necessary administrative and fiscal safeguards will be taken to ensure that wheat and wheat flour is not smuggled out and consumers get it at affordable prices.

“We will be lucky to harvest 17 to 17.5 million tons of wheat in Punjab this season because farmers are putting it at 16.5 million tons,” Bilal Sufi, a senior flour miller, informed Dawn on Wednesday from Lahore.

Based on last year’s bitter experience, Sufi’s advice to the next government is to make a quick realistic assessment of the crop at the earliest and if the availability is found less than 20 million tons, arrangements should be made to import 1.5 to two million tons for the season.

Sufi’s estimate of wheat crop was endorsed by Shabbir Sheikh, a miller from Rawalpindi who is certain that the officials are aware of the problem and have made arrangements to ensure round the year steady supply of the grain. Planners were projecting a harvest of 20 million tons harvest in Punjab, 2.5 to 3 million tons in Sindh and about one million tons from the NWFP and Balochistan.

Last season too, the government made a highly optimistic assessment of the crop 23 million to 24 million tons and much before the official agencies could procure 5 million tons of wheat from farmers, allowed export.

This gave an open licence to the speculators, profiteers and hoarders to jump in the field and offer more prices to farmers than officially fixed prices. Traders in India, Afghanistan and Central Asia offered much higher prices for wheat and as much as 1.5 to two million tons of wheat is said to have been smuggled out.

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