Sindh food minister grilled about wheat storage, export

Says province facing severe shortage of storage space.

KARACHI: Around 17,000 bags of wheat, each weighing 100kg, affected by floods during September 2010, are still lying at the Sindh Food Department’s granary in Khairpur Nathan Shah town, Dadu.

“The rain-affected stocks will be disposed off through an open auction and the process is underway,” Sindh Minister for Food Mir Nadar Magsi told the Sindh Assembly during the question hour on Friday.  “As regards newly purchased wheat, 40,000 new bags were purchased at Khairpur Nathan Shah and have been dispatched to Bolhari and Karachi warehouses,” he continued.

Replying to another question, the Sindh Food Minister said that his department is facing an acute shortage of space for wheat storage. He said the department has a storage capacity of only 0.642 million tons. He informed that to overcome the deficiency, private warehouses are being hired on a need basis. Meanwhile, the department had started the rehabilitation and renovation of 16 granaries – five in Larkana, six in Jacobabad and Kandhkot, three in Mirpur Khas and two in Sanghar – to augment storage capacity. Work on these 16 granaries has been completed, while work on 19 others in Hyderabad, and 28 in the Sukkur region, will be completed in 2013-14.

Moreover, under another scheme, five modern granaries each with 50, 000 ton capacity will be built in Karachi, Ghotki, Sanghar, Khairpur and Shaheed Benazirabad (Nawabshah), for which the bidding process under a public-private partnership is underway. A Technical and Financial Evaluation Committee has been formed to monitor the project, the minister told the house.

Responding to yet another question, the Sindh Food Minister replied that the department procured a record quantity of 1.412 million tons of wheat in 2011, against available storage capacity of 0.65 million tons. The stocks had, therefore, to be kept in the open but were simultaneously being shifted to consuming centers for release to flour mills.

The minister denied that wheat worth Rs6 billion was wasted due to packaging in plastic bags in Shaheed Benazirabad: hee said no plastic bags were used for wheat procurement.

Magsi also informed the house that the Food Department released a quantity of 352.36 million metric tons of wheat to exporters at Rs25,500 per 100 kilogrammes. The total value of this wheat was calculated as follows: support price Rs7.73 billion at Rs23,750 per ton; average incidental charges Rs1.389 billion at Rs4,270/- per ton; leading to a total cost of Rs9.116 billion at Rs28,020 per ton. The issue price was set at Rs8.26 billion at Rs25,500 per ton, with a net subsidy on export given by the provincial government worth Rs0.86 billion at Rs2,520 per ton.

Published in The Express Tribune, June 16^th, 2012.