LAHORE, Dec 9: The Punjab government may liberalise the release of wheat from January next and end the current quota system for mills, sources in the Food Department claimed here on Thursday.
According to them, a summary to this effect is being submitted to Chief Minister Pervaiz Elahi in the next few days for an approval. According to the departmental calculations, which are based on the information provided by the State Bank of Pakistan, private sector is still holding up to one million tons of wheat. The proposed gamble is aimed at taking that hoarding out by flooding the market.
The decision came on Wednesday with the federal government approving import of another 500,000 tons of wheat. It will be in addition to 940,000 tons already in the pipeline and due to arrive by Dec 18.
Out of it, 900,000 tons has already arrived and 60,000 tons will reach the Karachi port in a week's time. Meanwhile, the Trading Corporation of Pakistan (TCP) has floated tenders for another 40,000 tons to meet the target of one million tons import.
The department officials maintain that since the next 500,000 tons consignment is being imported on the request of the Punjab, it will reach the province directly much to the comfort of planners.
"The department is taking this gamble (of liberalising wheat release) as it has 1.7 million tons in its stocks," says one of its officials. "If it continues releasing 16,000 tons daily for the next 105 days left for the season, it will be left with some carryover of 50,000 tons. But the arrival of 500,000 tons imported wheat has given it required confidence for risking liberal releases, which means supply to each mill according to its demand." With liberal releases, hoarders will be forced to throw their stocks out and ease the market.
According to State Bank's commodity finance balance sheet, private sector is still holding around 800,000 tons of wheat, with 95 per cent of it in the Punjab. Add another 200,000 tons which people may have bought with their own money, the province is still hoarding around one million tons of wheat. If the policy is able to bring this hoarding out, the province may be carrying over around 500,000 tons - the new import order, he said.
