LAHORE: The Punjab government will provide 60,000 metric tons of wheat to the World Food Programme (WFP) at $276 per metric ton while bearing the incidental charges.
The incidental charges, which include interest rate and storage expenditure, and amount to Rs48 million. The action is contrary to what the Finance Department had suggested.
In its observations submitted to the chief minister, the department had suggested that the incidental charges be included in the price negotiated with the WFP.
The current wheat stock with the Food Department is around 5.9 million metric tons (MMT). The amount of wheat expected to be released during the remaining season is expected not to exceed 2.2 MMT; leaving behind 3.7 MMT as carry forward.
The chief minister had recently requested the federal government to allow export of the extra wheat in order to generate funds and create space for the upcoming procurement season.
Before getting a response from the prime minister, the Food Department was approached by the WFP for the purchase of 60,000 metric tons of wheat for provision of flour to the flood-affected areas.
The WFP quoted that it had purchased wheat from the federal government at $276 per metric tons alongwith bags in the recent past and asked that the Punjab government supply the wheat at the same rate.
The Food Department had sent a summary to the chief minister, which recommended that the Rs48 million incurred in incidental charges be waived.
However, the Finance Department disagreed with the Food Department’s suggestion.
The Finance Department recommended that incidental charges be included in the negotiated price as the amount was significant.
The inclusion of incidental charges would help the government to recover the entire cost that had been borne by it on the purchase and storage of the wheat stock, the Finance Department noted.
Chief Minister Shahbaz Sharif approved the waiver of the incidental charges and gave the Food department the go ahead to supply the required amount of wheat to the WFP.
Muhammad Irfan Elahi, the secretary for Food, said that the department had an abundant stock of wheat. “The government requires only 2.2 MMT until the next procurement season.
The money from the sale of wheat will enable the provincial government to procure wheat during the next season,” the secretary said. Certify
Published in The Express Tribune, December 17th, 2010.
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