ISLAMABAD:
The government on Wednesday approved the sale of 500,000 tonnes of wheat in the open market at subsidized prices, including nearly 300,000 tonnes of imported wheat, which may cause a loss of Rs 2,355 crore. per
In addition to the sale in the open market through competitive bidding, the government decided to sell an additional 300,000 tonnes of wheat to the Punjab government at Rs592 per tonne. 40 kg below its price.
The Economic Coordination Committee (ECC) of the Cabinet took the decision to sell the wheat at a loss, highlighting the federal government’s poor economic and commercial planning. Expensive wheat was imported in the past and will now be sold well below the cost of procurement and storage.
The 294,994 metric tons of imported wheat, brought in 2022, is currently stored at the bottom of the Pakistan Agriculture Storage and Services Corporation (PASSCO), which is being wound up by the federal government.
The ECC approved the disposal of 500,000 tonnes of PASSCO wheat stock through competitive bidding, citing objectives such as managing excess stocks, reducing storage costs, stabilizing domestic wheat prices and ensuring food security, according to a press release from the Ministry of Finance.
The Finance Division had proposed to fix a reserve price equal to the PASSCO cost of Rs 4,742 per 40 kg for local wheat and Rs 6,425 per 40 kg for imported wheat. However, the ECC approved the reserve price of Rs 4,400. for the local wheat and 4,070 Rs. for the imported wheat.
PASSCO has two million tonnes of wheat stocks available for disposal and the federal cabinet last month decided to close the unit.
The ECC was informed that the estimated economic loss for disposal of 500,000 tonnes of wheat, based on these prices, ranges from Rs20.5 billion to Rs22 billion. However, the annual carrying cost of the proposed quantity is estimated at over Rs.11 billion.
The farmers had suffered huge losses due to the abrupt decisions of the federal and Punjab governments to stop buying the wheat from the farmers two years ago. Prices fell as low as Rs2,500 per 40 kg, and the situation worsened further due to the import of wheat. Now, the finance ministry will provide approximately Rs 20 billion in grants to dispose of the wheat stocks, including Rs 9 billion that will be paid immediately.
The ECC was informed that PASSCO has had 294,994 tonnes of imported wheat stock since 2022, which is gradually losing its market value compared to fresh arrivals, a trend that will further intensify if stocks are maintained for a longer period.
The food ministry further said that the continued detention of the imported wheat resulted in escalating transportation costs and any delay in disposal is likely to put downward pressure on market prices in the upcoming harvest of Rabi season.
The Ministry of National Food Safety and Research has also become a den of experiments and mismanagement as the government has transferred one secretary food after another.
The ECC also approved the supply of 300,000 tonnes of PASSCO wheat to the Punjab government to maintain adequate supplies of wheat for flour mills, stabilize prices and ensure uninterrupted availability of wheat flour to consumers, the finance ministry said.
The Punjab government had requested the federal government to supply 300,000 tonnes of wheat from PASSCO’s warehouses on an urgent basis at Rs3900 per tonne. 40 kg rate. However, the cost of wheat including incidental charges for local wheat by PASSCO is calculated at PKR 4,742 per 40 kg.
The matter was referred to Deputy Prime Minister Ishaq Dar, who gave permission to sell the wheat at Rs 4,150. per 40 kg. The ECC rubber-stamped the Deputy Prime Minister’s decision on Wednesday. The federal government will bear a loss of Rs 4.4 billion on the 300,000 metric tonnes of wheat sales to Punjab.
The supervisory committee
All provinces as well as relevant federal institutions reported sufficient wheat stocks to meet the country’s current needs along with encouraging trends in crop sowing for the 2025-2026 Rabi season, according to an official statement on Wednesday.
Food Security Minister Rana Tanveer Hussain chaired the fourth meeting of the National Wheat Oversight Committee, which reviewed the overall wheat situation focusing on reserves, inter-provincial cooperation, procurement planning for 2026 and market stability.
The meeting was attended by representatives of all provinces and relevant federal institutions. The Committee reviewed the supply situation for wheat and expressed satisfaction that sufficient reserves are available to meet needs for the current year.
The meeting was informed that there has been no shortage of wheat throughout the country and that suitable arrangements are in place to ensure uninterrupted availability of the staple until the next harvest.
Wheat procurement strategies at the provincial level were also discussed with an emphasis on protecting farmers from exploitation. The provinces said effective monitoring and implementation measures have been taken at the district level to ensure fair returns to the farmers.
While reviewing the role of the private sector, the meeting was informed that regulatory mechanisms are operational to protect the interests of farmers. Inter-provincial coordination was highlighted as essential to maintaining efficiency and market balance at the national level.
Regarding the sowing season, the meeting noted encouraging trends reflecting farmers’ confidence and improved farming practices. Concluding the meeting, the minister reaffirmed the government’s commitment to food security, stable markets and maintaining adequate strategic reserves.
