November 21, 2003	Friday	Ramazan 25, 1424

ISLAMABAD, Nov 20: The government on Thursday withdrew a 25-per cent duty on wheat import but withheld a decision on the import quantity owing to non-availability of sufficient data on private sector stocks.

The decision was taken by the Economic Coordination Committee (ECC) of the cabinet which met here with Finance Minister Shaukat Aziz in the chair.

A cabinet member told Dawn the ECC directed the State Bank of Pakistan, the food and agriculture ministry and the provincial governments to physically check the private sector stocks position so as to reach a conclusion as to how much import should be made. A final decision would be made by the ECC at a later meeting.

The sources said the private sector normally borrowed from the banking sector to procure wheat stocks and pledged respective quantities with the banks. The SBP would now collect the data from the banks as to how much quantities of wheat have been pledged by the private sector.

The meeting was informed that in view of rising wheat prices, particularly owing to increase in the support price of the commodity, the private sector was likely to hoard the commodity for a couple of months to earn a better profit.

The private parties, the sources said, would lose nothing in hoarding as mark-up rates were at the lowest ebb, while expected return due to delayed releases was higher. The SBP was also asked to see whether the private sector had really procured the wheat for which they had borrowed money from the banks and where these stocks were being kept.

The ECC also directed to carefully identify prospective sources of import and ascertain prevailing international market price so that a better import arrangements could be made.

The Sindh and NWFP governments informed the ECC that they had stocks of about 50 days requirement.

While proposing about 0.5 million tons of wheat import, the ministry of food had informed the ECC that sufficient stocks were available with the private sector but neither exact size could be ascertained nor it could be expected from the private sector to release these stocks in an honest manner. This, the ministry had pointed out, could result in artificial price hike and shortage of the essential commodity.

Meanwhile, an official announcement said the ECC decided to bring the import duty on wheat from 25 per cent to zero per cent. The total wheat production was sufficient for the consumption requirement of the country and both the federal and provincial governments would ensure the adequate supply of wheat in the country, it added.

The statement said the SBP and the provincial governments had been asked to review the stocks position. The government will continue to monitor the wheat situation very closely and will take every decision to maintain adequate supply.

The ECC was told that during July-September 2003-04, the overall industrial production increased by 11.74 per cent. Furthermore, the growth in industrial production was highly broad based.

For example food, beverages and tobacco industry registered a growth of 10.6 per cent and within this broad category, cooking oil and cigarette, respectively, registered a growth of 19.9 per cent and 16.4 per cent.

The production in textile sector grew by 5.1 per cent, in particular, cotton cloth registered a growth of 19.4 per cent. Leather products witnessed impressive recovery and grew by 29 per cent. The chemicals, rubber and plastic industry registered a growth of 10.3 per cent.

The non-metallic mineral products registered growth of 16.4 per cent, in particular, cement production has increased by 17.2 per cent during the first quarter of the fiscal year. The basic metal industry which includes pig-iron, billets, etc., grew by 13.5 per cent.

Metal products machinery and equipments registered an impressive growth of 33.1 per cent. In particular diesel engine grew by 13.8 per cent, tractors 42.2 per cent, sewing machines 32 per cent and refrigerators 42.4 per cent.

The automobile sector, which has been witnessing strong growth in the last 1-2 years, continued its tradition during the first quarter of the fiscal year as well and registered a growth of 50.2 per cent. Within automobile sector, car production grew by 58.2 per cent, motorcycle production increased by 65.8 per cent, trucks by 18.5 per cent and bicycles by 6.2 per cent.

The ECC highly appreciated the performance of industrial sector and highlighted that as a result of improved macro- economic environment, sharp reduction in interest rates, reduction in imports duties, and availabilities of consumer finances have resulted in the sharp increase in industrial production.

This also indicates a rising level of investment in the country. The sharp increase in industrial production is consistent with equally stronger growth in exports and revenue collection during the same period, which suggests that the country is rapidly moving towards higher growth path.

The ECC also approved various measures which will clean the balance sheet of Habib Bank and Pakistan State Oil for early privatization of these two public sector entities.

The ECC also approved the procurement of fully-equipped specialized cardiac ambulance for VVIP usage.