Despite achieving the minimum procurement target, Punjab may have to import wheat to meet its needs and maintain strategic reserves.
According to sources, the provincial food department is facing a shortage of about 800,000 tonnes of wheat.
The latest official data shows that the department was able to procure 3.69 tonnes of wheat from farmers by the conclusion of the procurement drive on June 15 against the year’s maximum target of 4.5 million tonnes. Subsequent action taken with the help of the district administrations to seize illegally stored wheat is also likely to prove insufficient and at least 800,000 tonnes of the commodity may have to be imported.
The Punjab food secretary has issued a notification to end the wheat procurement campaign. In addition to stopping the procurement campaign, he ordered the district administrations to continue operations to ensure smooth supply.
However, the sources said the department had not made any significant progress towards purchasing relatively cheap wheat from the global market, which could affect consumers in the coming months.
The provincial food ministry appears to lack a clear policy on the issue. The department had set a minimum procurement target of 3.5 million tonnes in case of a bad crop or unfavourable situation.
Although there has been a bumper crop of wheat in Punjab this year, the department started celebrating when the minimum purchase target was met. Last year, the Punjab Food Department had reserves of about 4.7 million tonnes and about five million tonnes, including imported wheat, were released to flour mills at low prices.
If the requirement need of the province and the procurement figures of last year are compared, the department has procured about 800,000 tonnes less wheat than required.
Last year, the private sector was not allowed to buy wheat directly but the mills reportedly bought about 150,000 of the grain.
Taking advantage of laxity in the food department's procurement drive this year, the mills have reportedly procured more than 1.3 million tonnes of wheat this year, which would have to be monitored by the authorities concerned.
The sources in the sector said Punjab might have to buy 1.8 million tonnes of wheat to meet it needs and maintain strategic reserves of one million tonnes. However, measures in this regard have been slow.
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The storage of wheat by the food department is very important to keep the prices of flour in check. If the price of wheat in the market rises, the department releases the commodity from government warehouses to keep the rates stable. With the price of wheat stabilising, the cost of flour is kept under control. However, the food department does not have sufficient wheat to maintain the price control for the whole year. This could lead to cycles of rising wheat and flour prices in the market.In contrast, Khyber-Pakhtunkhwa, with the help of the federal government, has received timely approval to import 500,000 tonnes of wheat and acquiring 500,000 tonnes from Pakistan Agricultural Storage and Services Corporation.
The department will need to monitor the flour mills to curb a rise in prices as it has complete record of wheat purchases made by them. Complaints of tampering with the record have during flour and wheat price scandals have been reported in the past.
Sources in the food department said one of the reasons for less procurement was that the support price in Punjab was Rs200 lower than Sindh, due to which private buyers were preferred.
However, the sources said the overall situation of wheat availability in Punjab was satisfactory and the government was taking appropriate measures in this regard.
Published in The Express Tribune, June 21st, 2021.