Shortage: Imports delayed, gram prices may surge

Country needs to buy 193,000 tons overseas to cater to local demand

ISLAMABAD: Prices of gram are likely to inflate in coming months as the Trading Corporation of Pakistan (TCP) has failed to import the commodity despite repeated attempts to bridge shortfall in the domestic market.

According to officials aware of the development, the Economic Coordination Committee (ECC) in its meeting on August 26 had granted permission to the TCP, a state-owned grain trading agency, to float tenders in order to intervene and give a message to the market that gram supply would remain smooth at reasonable prices.

In early November, the Ministry of National Food Security and Research told the ECC that the TCP had processed an open tender for the import of 5,000 tons of Desi chickpeas (gram) from the international market. An invitation for tenders was published in national newspapers on September 17, 2016.

The first tender for imports was opened on November 18, 2016 followed by another tender, but no party participated in the process.

Representatives of both local and foreign suppliers argued that the size and grain weight of chickpeas, mentioned in both the tenders, could not be easily arranged as available stocks in the international market did not meet required standards. However, the TCP replied that grain specifications could not be changed.

In Pakistan’s market, prices of chickpeas have increased compared to the previous year for reasons of short and erratic supply. Now, gram is being sold for Rs160 per kg.

This year, about 407,000 tons of gram pulse is available compared to annual consumption of 600,000 tons. This gap necessitates the need for import of 193,000 tons to cater to the unmet demand.

It is expected the private sector will import a smaller quantity of around 37,500 to 50,000 tons of chickpeas.

The weighted average cost and freight (c&f) price of Desi chickpeas at Karachi stood at $500 per ton in March whereas now it has gone up to $1,200-1,500 per ton. Prices may increase further in coming months, the ECC was told.

Early purchase of chickpeas is expected to lead to significant savings as some Asian countries including India and Bangladesh are already shopping in the global market because of poor crops there. This may push a gradual increase in prices by the time Australian crop is harvested.

At present, according to the TCP, it is not in a position to import Desi chickpeas because of less time and unavailability of the commodity according to given standards. In the meantime, the private sector is regularly importing to somewhat bridge the gap.

The national food security minister told the ECC that gram crop heavily depended on rains and the crop was unlikely to produce good results due to lack of showers.

Comparing with chickpea prices in regional countries, he said rates were also high in India and Bangladesh.

The Commerce Division secretary stated that keeping in view the procedural formalities, the TCP would not be able to import gram before the arrival of next crop in the market. “Chickpea import through the TCP at this point in time is less likely to achieve the desired goal of price stabilisation in the country,” he said.

The secretary suggested that instead of making imports, administrative measures should be taken by the Ministry of National Food Security in coordination with all provinces for controlling the gram price.

Consequently, the ECC directed the food ministry to approach the provinces for undertaking price control measures in their respective regions.

Published in The Express Tribune, December 4^th, 2016.

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