To avoid growing cost, govt plans to cut wheat stocks
1m tons of strategic reserves could be reduced by half.
The private sector has exported 300,000 tons of wheat from July-January 2014 while importing 470,000 tons. PHOTO: FILE
ISLAMABAD:
The government has decided to reduce its strategic reserves of wheat and release them in the market in an attempt to stabilise flour prices and avoid growing cost of keeping stocks in its storages.
The decision came as the Ministry of Finance suggested in a meeting of the Economic Coordination Committee (ECC) of the cabinet, held on March 11, that one million tons of wheat stocks should be reduced to 500,000 tons keeping in view the limited fiscal space available to the government, sources say.
“These reserves may be declared from within the Pakistan Agriculture Storage and Services Corporation’s (Passco) wheat procurement target of 1.6 million tons for the 2013-14 crop,” the ministry said.
The ECC was told that wheat stocks with the public sector as on March 3 were 2.468 million tons including reserves of one million tons being kept by Passco. Closing stocks are expected to be around 1.41 million tons at the end of the current food year.
In the ongoing 2013-14 season, the private sector has
exported 300,000 tons of wheat from July 2013 to January 2014 while imports stood at 470,000 tons.
Last season, public-sector institutions purchased 5.95 million tons of wheat from farmers, falling short of the target of 7.91 million tons because of reduced supplies in the open market. In the last three seasons, these institutions have on average purchased around six million tons per annum.
As part of efforts to ensure food security and fair returns to the growers, Passco and provinces buy wheat at a set price. This fiscal year, the federal government has kept the wheat support price on hold at Rs1,200 per 40 kg and fixed procurement target at eight million tons.
The government annually announces the support price for the commodity. Before fixing it this season, the Ministry of National Food Security and Research engaged in consultations with the provincial departments, starting October 2013. A majority of provinces agreed to leaving the support price for the 2013-14 crop unchanged at last year’s level of Rs1,200 per 40 kg.
Officials told the ECC that the public sector maintained the stocks in order to increase supplies during lean periods and meet food needs of the provinces facing a deficit. A part of the stocks is kept as strategic reserves to cope with emergencies as well as meet international obligations.
Published in The Express Tribune, March 18th, 2014.
The government has decided to reduce its strategic reserves of wheat and release them in the market in an attempt to stabilise flour prices and avoid growing cost of keeping stocks in its storages.
The decision came as the Ministry of Finance suggested in a meeting of the Economic Coordination Committee (ECC) of the cabinet, held on March 11, that one million tons of wheat stocks should be reduced to 500,000 tons keeping in view the limited fiscal space available to the government, sources say.
“These reserves may be declared from within the Pakistan Agriculture Storage and Services Corporation’s (Passco) wheat procurement target of 1.6 million tons for the 2013-14 crop,” the ministry said.
The ECC was told that wheat stocks with the public sector as on March 3 were 2.468 million tons including reserves of one million tons being kept by Passco. Closing stocks are expected to be around 1.41 million tons at the end of the current food year.
In the ongoing 2013-14 season, the private sector has
exported 300,000 tons of wheat from July 2013 to January 2014 while imports stood at 470,000 tons.
Last season, public-sector institutions purchased 5.95 million tons of wheat from farmers, falling short of the target of 7.91 million tons because of reduced supplies in the open market. In the last three seasons, these institutions have on average purchased around six million tons per annum.
As part of efforts to ensure food security and fair returns to the growers, Passco and provinces buy wheat at a set price. This fiscal year, the federal government has kept the wheat support price on hold at Rs1,200 per 40 kg and fixed procurement target at eight million tons.
The government annually announces the support price for the commodity. Before fixing it this season, the Ministry of National Food Security and Research engaged in consultations with the provincial departments, starting October 2013. A majority of provinces agreed to leaving the support price for the 2013-14 crop unchanged at last year’s level of Rs1,200 per 40 kg.
Officials told the ECC that the public sector maintained the stocks in order to increase supplies during lean periods and meet food needs of the provinces facing a deficit. A part of the stocks is kept as strategic reserves to cope with emergencies as well as meet international obligations.
Published in The Express Tribune, March 18th, 2014.