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| September 27, 2005 | Tuesday | Sha'aban 22, 1426 |
Regular wheat releases to mills in November
LAHORE, Sept 26: The Punjab Food department may delay regular wheat releases to mills till the middle of November as the market is stated to be stable. It plans to release 100,000 tons of wheat during Ramazan under a special package of Rs400 per 40kg — the price it paid during purchases.
The department officials maintain that there is around one million tons of wheat with the private sector if the State Bank statistics are to be believed. Each bag of wheat carries Rs10 incidental charges per month. The private sector has been keeping these bags for the last four months at a cost of Rs40 per bag. It will be tempted to market the wheat in the next 45 days as its cost-benefit ratio enters the stage of diminishing returns.
Should that happen, which, according to departmental calculations is bound to happen, wheat price in the open market will remain below the expected issuance price.
The department officials say that at present wheat price is hovering between Rs410 to Rs440 per 40kg in the open market. With private sector pouring another one million tons during the next six weeks, the price will stabilise.
“If the price starts rising in areas where it is Rs410 per 40kg, the department will start releasing its stocks,” says Muhammad Ijaz, Director Food.
After Ramazan, the department will be left with 2.4 million tons of stocks and will be in a ‘position to go for liberal releases’.
Talking about import of wheat, another official of the department maintained that Punjab was still pressing the federal government for one million tons of import. That is to meet any contingency and to build up strategic reserves. The federal government has not taken any decision.
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