Fears of wheat shortage as Sindh govt fails to make payments to PASSCO

Flour mill owners have already paid the full amount to the Sindh govt

LAHORE: Fears of a severe shortage of wheat in Sindh are growing as the Pakistan Agricultural Storage and Services Corporation (PASSCO) has stopped the supply of wheat to the provincial government after the latter's failure to make timely payments for the previous consignment.

Retailers and wholesalers are expecting both the availability and price of the commodity to be affected as the supply has been stopped for the last eight days. Meanwhile, the flour mill owners, who have paid advance amounts to the Sindh food department for 90,000 bags of wheat, are still waiting for their consignments.

Last month, the Economic Coordination Committee had given the go-ahead to PASSCO to dispatch 0.95 million tonnes of its surplus stock of wheat at subsidised rates to Khyber Pakhtunkhwa, Sindh and Balochistan. The federal government had also announced that it would bear 50% of the cost of subsidy.

Sindh struggles to stabilise wheat prices

The first consignment was dispatched to Sindh in the middle of November, 2019. However, non-failure of payment for the consignment within the stipulated time has forced PASSCO to suspend the supply, raising fears of wheat shortage in Sindh, particularly in Karachi. On Friday, the price of flour was recorded at Rs46 to Rs48 per kilogramme in the open market.

The chairman of the Sindh Flour Mills Association, Khalid Masood, told The Express Tribune that the supply of wheat to flour mills by both the provincial food department and PASSCO has been suspended since November 28.

According to Masood, the supply was discontinued after delays in payments by the Sindh government. He added that the Sindh food department has also stopped providing wheat from its reserves. The mill owners have been instructed to procure wheat from Khairpur, but when they approached the centre in-charge, they were told that they did not have any wheat.

Masood said that a week ago, flour mills had made advance payments to the Sindh food department through the State Bank of Pakistan, but still no wheat has been provided to them. He added that Jahangir Tareen, a close associate of the prime minister, was also informed about the situation a few days ago.

On December 6, the association wrote a letter to the federal minister for national food security, Khusro Bakhtiar, drawing attention to the fact that Sindh faces a critical situation because of the provincial food department's negligence in procuring wheat during the buying season.

Masood said that the flour mills are under tremendous pressure and there is risk of a food crisis erupting in Karachi. He demanded that the flour mills be sold wheat by PASSCO directly, instead of the Sindh food department.

According to PASSCO officials, the Sindh govt has been supplied with a total of 60,000 tonnes of wheat, but they have only paid for 24,000 tonnes. Moreover, the flour mills have already paid the full amount to the Sindh food department. The official clarified that despite the delay in payment, the supply of wheat has not been stopped.

Pakistan's wheat production likely to hit five-year low

However, sources with knowledge of the situation told The Express Tribune that the wheat is not being sold through PASSCO to godowns. Despite repeated attempts, Sindh food secretary Muhammad Laiq could not be reached for comment.

Meanwhile, a Sindh food department official, speaking on condition of anonymity, told The Express Tribune that they had temporarily stopped the supply of wheat due to some complaints. Asked about the nature of the complaints, the official said that some flour mills had been found selling government wheat in the open market. Besides, he said, they were also trying to shift the wheat stock from Khairpur to Karachi. He added that they have paid Rs900 million to PASSCO, while the remaining amount will be paid soon.

Until now, the Sindh government has only paid Rs900 million, while the total amount due is over Rs3 billion. Speaking to The Express Tribune, the food security commissioner of the ministry of federal national food security, Imtiaz Ali Gobang, said that they had managed to supply wheat to all provinces on time and there was no delay from their side.

Published in The Express Tribune, December 7^th, 2019.