Punjab, Sindh seek urgent wheat
The federal and provincial governments met on Monday for the second time to avert a brewing wheat crisis after two largest producing provinces declared shortages and sought releases from federal reserves to arrest soaring prices.
Punjab has demanded one million tonnes from the federal government while Sindh has asked a minimum 220,000 metric tonnes from federal stocks currently available in godowns in the province, officials who attended the meeting told The Express Tribune.
The shortages, particularly in Punjab and Sindh – the country's food baskets – are rooted in two decisions: ending the wheat support price two years ago under an International Monetary Fund (IMF) condition without creating a credible alternative arrangement, and the failure of both provinces to procure wheat from farmers this year.
Headed by Economic Affairs Minister Ahad Cheema, the meeting reviewed the possibility of importing the commodity but deferred a final decision until all four provinces submit their final demands for wheat.
"The meeting also reviewed the option of importing wheat to strengthen strategic reserves, if necessary," according to a press statement issued by Cheema's office. He stressed that any decision on imports would be taken only after a comprehensive assessment of domestic market conditions.
The crisis is building up despite the country officially producing 29.8 million tonnes of wheat this year. The Afghanistan border has also been closed since November, ending any prospects of smuggling. Cheema emphasised that protecting the interests of local farmers and growers would remain the government's foremost priority and that no decision would be made at their expense.
This was the second meeting in five days between federal and provincial representatives, with another expected in the next 24 hours amid a 6% increase in wheat and flour prices. A senior government functionary said that after meeting provincial requests from the 1.7 million tonnes of stocks held by Pakistan Agriculture Storage and Services Corporation (PASSCO), the federal government would be completely depleted. The federal government may have to import 500,000 to one million tonnes to deal with any untoward situation, he added.
Sources said that during the meeting, Punjab asked for one million tonnes from PASSCO, Sindh demanded 220,000 to 700,000 tonnes from Punjab, and Khyber-Pakhtunkhwa (K-P) sought about 100,000 tonnes for the public sector and another 700,000 for the private sector. K-P also asked for local wheat. Sindh demanded that Punjab soften its border controls so the province could meet its requirements. However, Punjab did not agree, citing its own supply management challenges, officials said. Cheema asked provinces to share their final requirements in writing.
Wheat stock situation
The country has 29.78 million metrictonnes of production this year in addition to two million tonnes of stocks from the previous year. Estimated requirements are 31.66 million tonnes, which is 125,000 tonnes less than available stocks, according to the food ministry. However, officials said Punjab has been unable to trace about four million tonnes of wheat it believed was hoarded. Punjab also failed to procure three million tonnes from farmers, with procurements remaining at 480,000 tonnes. Sindh procured little over 200,000 tonnes.
A handout from the Ministry of Economic Affairs stated that representatives of all provinces "informed the meeting that the wheat market remains stable across the country, with no immediate shortage or crisis". Provinces also highlighted that strict action against hoarding and market manipulation is continuing to prevent artificial shortages and unjustified price increases.
Price trend
Official data shows wheat prices rose across the country between June 11 and July 9. In Punjab, the price increased from Rs4,188 to Rs4,423 per 40 kg – a surge of Rs235 within a month. In Sindh, prices rose from Rs4,188 to Rs4,625 per 40 kg – an increase of Rs437. In K-P, prices rose from Rs4,947 to Rs5,100 per 40 kg, while in Balochistan prices increased from Rs4,760 to Rs4,800.
Flour prices reached Rs142 per kg in Rawalpindi, Islamabad, Peshawar and Karachi, while in Gujranwala flour was Rs130 per kg.
"This is the first time a serious wheat crisis is brewing within four months of harvesting," said Muzzammil Aslam, finance adviser to the K-P government. He said Punjab was supposed to buy three million tonnes but could not even buy 500,000, sowing the seed of crisis. "Provincial reserves are at extremely low levels. Availability is a major concern and the only possible way to reduce prices is to import wheat."
Cheema said wheat stocks would be released to provinces in accordance with MoUs signed with PASSCO. He assured provinces that additional wheat would be made available whenever required to meet any emerging demand.
Federal Minister for National Food Security Rana Tanveer Hussain informed the meeting that PASSCO was providing full support to provincial governments to ensure smooth wheat supply and effective stock management, according to the handout.
Cheema reiterated that federal and provincial governments are working in close coordination to ensure uninterrupted wheat availability, maintain market stability, and safeguard both consumers and farmers.