Supply position in Sindh uncertain: Wheat stocks depleted
By Sabihuddin Ghausi
KARACHI, Jan 14: Wheat supply position in Sindh has become more uncertain after a decision of the Sindh High Court on January 9 that asked the provincial food department to release 69,000 tons of wheat stock
that was auctioned last August to a commodity merchant of Ghotki at a virtual throwaway price of Rs6.37 a kilogramme.
The Sindh food department reported 157,000 tons of wheat in December. This stock was depleted to 84,000 tons after release of balance allocation of 73,000 tons during December. The January has begun with 84,000 tons of wheat stock. Of this 69,000 tons will have to be released on court orders as no review petition has been filed till Wednesday.
This leaves the province with a net 15,000 tons of wheat. About 5,000 tons of wheat is pouring in every day from PASSCO's godowns in Punjab. PASSCO originally committed 65,000 tons of wheat but now has raised it one lakh tons.
Sindh lives on mere promises of wheat supply - 90,000 tons out of 150,000 being imported by PASSCO and expected to be delivered at Port Qasim in Karachi during second week of February and about one lakh tons from Punjab amidst reports that retail flour prices in certain Karachi markets have touched Rs16 a kilogramme.
In Soldier Bazar flour was being sold at Rs14 a kilogramme on Wednesday and shopkeepers warned of a fresh flare up in prices in the market as wheat supply position would become more uncertain in the province in the coming days.
Sindh Food Minister Arif Jatoi hopes to get 100,000 tons of wheat from Punjab but well placed sources say that government functionaries in Lahore have not given any categorical commitment to Karachi so far.
But he sounded tentative and uncertain when asked how much is the stock of wheat the government has at present and how much quantity is being released. "We are releasing wheat from our stocks under a managed system," he said.
"What will be the cost of imported wheat and who will bear the additional cost," the minister was asked. He expressed his ignorance of the imported cost but hopes that federal government will foot the bill of additional cost.
Market analyst put a conservative cost of the imported wheat at Rs14 a kg and after accounting for handling and other charges it may go up to Rs15 to 16 a kg. After adding grinding cost, the flour of imported wheat may cost anywhere from Rs18 to Rs19 a kg. It means a minimum increase of Rs8 on a kilogramme which is Rs80,000 on a ton and Rs800 million on a lakh tons.
"We will get one lakh tons wheat from Punjab against our 60 per cent share in 150,000 tons of wheat being imported by PASSCO in February," Arif Jatoi informed this correspondent.
Sindh government wheat stocks are depleted because of generous release of 483,000 tons during three months of October, November and December. Released on issue price of Rs850 for 100 kilogramme bag, most of the millers stocked this wheat and are either grinding it to sell flour at a higher cost or have sold away their wheat stocks through brokers.
Officials admit of having released 108,000 tons of wheat in October, 21,000 tons in November and 165,000 tons in December to what they explain pre-Ramzan, Ramzan and post-Ramzan demand.
Against an estimated availability of 118,000 tons of wheat there is a demand of more than four lakh tons to meet the three months pre-harvesting period.
Wheat is being sold in open market at Rs1,150 for a 100 kilogramme bag. This wheat comes from the stocks of millers and traders in Sindh and Punjab who bought their stock at the rate of Rs850 for a 100 kilogramme bag from government stocks. They borrowed heavily from banks at 3 to 4 per cent and are now reaping rich profits in lean period of three months before the harvesting of next crop.
Falling bank rates have proved to be a bonanza for rich traders and millers who share their windfall gains with corrupt officers of provincial food departments. But life for the poor consumers have become a little more miserable as they have to pay Rs15 and Rs16 for a kilogramme of flour. Prices of bakery products and tandoor roti is also increasing.
