Govt looks to lift soybean output

ISLAMABAD:

Keeping in view the high prices of soybean and palm oil in the global market, the government has decided to offer incentives to growers in the upcoming budget to increasing the domestic farming of the two commodities.

Sources told The Express Tribune that Finance Minister Shaukat Tarin had directed the Ministry of National Food Security and Research to prepare an effective proposal for ramping up the soybean and palm farming along with an incentive structure for growers before the upcoming budget for fiscal year 2022-23.

The issue was raised in a recent meeting of the National Price Monitoring Committee (NPMC) held on March 9.

During the meeting, it was noted that prices of soybean and palm oil in the international market had surged to $1,719 and $1,734 a ton respectively, “which is very alarming keeping in view the total dependency on import of these commodities”.

The food security minister informed the meeting participants that almost $3.5 billion was spent on the import of the two commodities, which created challenges.

In recent months, prices of cooking oil have surged to record levels in Pakistan, which set off alarm bells for the government.

High prices of commodities including cooking oil have also caused hardships to the masses, who are already reeling from the soaring inflation.

The economic adviser informed the NPMC that the Consumer Price Index (CPI) for February 2022 surged to 12.24% year-on-year as compared to 8.7% in the same month of previous year.

On a month-on-month basis, the CPI stood at 1.15% as compared to 0.39% in January 2022, he said.

During July-February 2021-22, the CPI was recorded at 10.52% as compared to 8.25% in the same period of previous year.

The meeting was told that prices of tomato increased by 191% month-on-month and 310% year-on-year.

Tarin emphasised that Pakistan Bureau of Statistics (PBS), while releasing the CPI figures, may also identify the major items that contributed to a massive increase in the CPI reading and calculate the index by excluding those outliers for analysis by the policymakers.

The meeting noted that the Sensitive Price Indicator (SPI) for the week ended March 3, 2022 recorded a slight increase of 0.04% as compared to an increase of 0.51% in the previous week.

Prices of 13 items decreased, 19 items remained stable and another 19 items registered a slight increase.

During the week under review, prices of tomato, eggs, diesel, petrol, garlic, moong pulse, masoor pulse, onion, wheat flour, sugar, potato and mash pulse decreased and contributed 1.16% to the decline in the SPI.

However, an increase was witnessed in prices of chicken, liquefied petroleum gas, vegetable ghee/ edible oil, milk (fresh), etc, which contributed 1.19% to the increase in the SPI.

Regarding wheat, the food security secretary apprised the meeting that “carry-forward stock position of Punjab is on the conservative side, which will be finalised next week”.

The total carry-forward stock was estimated at 1.5 million tons till the arrival of new crop, he said. “However, it is expected that the carry-forward stock will be around 1.9 million tons.”

In that regard, the finance minister directed the ministry of food security to streamline the carry-forward stock position in consultation with the provincial governments and work out a realistic wheat production estimate to assess the future requirement for import.

The meeting was told that prices of all items, particularly wheat, were much higher in Balochistan as compared to other provinces.

The province was unable to lift wheat from Pakistan Agricultural Storage and Services Corporation (Passco) stock as prices were higher, it was told.

In that regard, the food security ministry was directed to devise a mechanism in consultation with Passco for enabling the Balochistan government to lift wheat at a relatively lower price.

Published in The Express Tribune, March 12^th, 2022.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.