September 16, 2003	Tuesday	Rajab 18, 1424

KARACHI, Sept 15: Commodity traders and millers fear wheat shortages in NWFP, Balochistan and Sindh during coming winter as government reports a little over four million tons of stock and about 700,000 tons available in the open market.

There is a growing demand to allow wheat import in private sector to preempt any shortages during winter when wheat consumption goes up in all parts of the country.

All these wheat shortages are being feared despite reports of good crops in last three consecutive years. These are being attributed to bad handling and rampant corruption in the provincial food departments. Wheat procurement and subsequent releases from government stocks involve huge subsidies in billions of rupees and hence the messing up of wheat availability.

At present Sindh’s stuck up debt balance with banks on account of wheat stocks is said to be more than Rs7 billion. A nexus of officials, traders and millers operate in the provinces including Sindh to create wheat crisis warranting auction of government stocks or a situation for distress import.

Market reports suggest a constant outflow of wheat from NWFP and Balochistan to Afghanistan everyday across the “porous and unmanageable border” to quote a trader despite mobilization of troops at many places on either side of the border. Conservative estimate put 1,000 to 1,500 tons of wheat going out to Afghanistan daily. A few traders say as much as 4,000 to 5,000 tons of wheat is going to Afghanistan every day.

Officials put wheat stock position at the end of August at 4.11 million tons in all parts of the country. This included 0.8 million tons available in Passco stocks. Passco will give 292,000 tons to NWFP, 201,000 tons to Balochistan while remaining quantity is for Azad Kashmir and defence forces.

A senior official of federal food ministry in Islamabad confirmed on telephone that Sindh is likely to suffer a deficit of about 50,000 tons of wheat before the harvesting of next crop due late March and early April. But traders and millers dispute this shortage figure and say that it would be much more acute.

Official wheat stocks in Sindh were reported at 559,000 tons on September 3. “But more than 200,000 tons of wheat has been procured from 00, 01 and 02 crops and is not fit for human consumption,” Sheikh Akhtar Hussain, a former Chairman Pakistan Flour Mills Association, informed Dawn. Only 300,000 tons of wheat from 03 crop is fit for human consumption. About 100,000 tons is said to be available in open market. Roughly 150,000 tons of wheat is consumed in the province every month and there are at least five more months before the next crop is harvested.

Sindh had to auction more than 68,000 of stocks from old wheat crops early last month. Against an officially fixed price of Rs8,270 for a ton the stock was auctioned at Rs5,170 per ton. “We have re-negotiated this bid price to Rs6,370 a ton,” a well placed source in Sindh government informed Dawn. “It is a straight loss of Rs1,900 on every ton,” a market analyst remarked who said that total loss comes to more than Rs342 million plus the handling charges and financial cost on which the loans were taken from banks a year ago.

Efforts were made to reach Sindh Food Minister Arif Jatoi, Food Secretary Mr Barq and Food Director Narejo on Saturday and Monday to find out official version on wheat auction and availability of wheat. None was available despite many telephone calls. The sources said that auctioned wheat has not been released as yet and a decision on this issue will be taken at the highest level involving the governor as well as the chief minister.

An official document puts wheat stocks in NWFP at 92,000 tons and it expects release of 200,000 tons from Passco. Market reports suggest that outflow of wheat from NWFP to Afghanistan will pick up as winter approaches and there is bound to be shortages by November and December.

Balochistan’s stocks are 40,000 tons and another 201,000 tons would come from Passco. Official estimate for consumption is 209,000 tons wheat against availability of 240,000 tons. “Only time will tell how true these estimates are,” a skeptic trader remarked.

Punjab is the only province with surplus wheat. It has about 2.5 million tons of government wheat stocks and about 600,000 tons available from the open market. Total consumption is expected to be around 2.6 million tons and about half a million tons would be available to meet deficits in Sindh, NWFP and Balochistan. Officials are relying entirely on this surplus stock and contend that wheat outflow to Afghanistan has been included in all their estimates.