12 July 2004	Monday	23 Jamadi-ul-Awwal 1425

LAHORE, July 11: The federal government is 'actively considering' to import flour from India to meet local requirements.

According to sources in the Ministry of Food, Agriculture and Livestock (Minfal), the federal government has been forced to consider this option because of ever growing gap between demand and supply of wheat and subsequent skyrocketing of flour price; it has gone up by almost 30 per cent during the last one year.

The government has floated a tender for the import of 500,000 tons of wheat, but the consignment will arrive by the end of August if everything goes well. In practical terms, it means another 45 days before the arrival of any foreign supply.

The country can hardly afford this if the present wheat supply condition is something to go by, they said. Price of wheat has already gone up to Rs425 per 40kg in the open market against the government-fixed support price of Rs358. Fear is that if nothing drastic is done in the next week or so, the price of wheat will further shoot up and create a social chaos in the country.

Government circles are now expressing serious doubts about the crop size in the country. They are of the firm opinion that the Punjab did not produce more than 15 million tons of wheat against its claim of 15.8 million tons.

Of it, around 33 per cent (5 million tons) becomes, what is known as, tradable surplus. The government and private sector have already procured around 5 million tons.

The Punjab Food Department has bought 2.4 million tons, Passco 800,000 tons, millers purchased 1.3 million tons, licensee buyers some 250,000 tons and unlicensed hoarders some 200,000 tons. This is now official because every one has declared its stocks.

The sum total of this purchase is around 5 million tons. That means that the market has now gone dry and price will only go up if nothing is done immediately.

The government is cannot allow the import of wheat for the fear of Karnal Bunt fungus. Though this kind of fungus is not injurious to human health when used as flour, it does infect wheat seed and become a deterrent for export.

Pakistan had recently rejected Australian wheat on the basis of same fungus. The government fears that if Indian wheat is imported, it may infect local wheat. So, import of flour will be safe but wheat will be risky.

Price is another attraction for the government. It will only cost Rs150 per 20kg against the market price of Rs225 in Pakistan. In addition to the import of Indian flour, the government has also been keeping an option of further import of one million tons of wheat by November.

It will be importing 500,000 tons every month in August, September and October. If pressure on wheat market does not ease up by October, the government will order another million to meet local food requirements. Meanwhile, day-to-day needs of food will be met through import of flour from India.