ABOUT a dozen companies have shown interest in constructing modern bulk wheat silos in Sindh on a public-private partnership basis. The bids are expected to be finalised and evaluated, and the contracts awarded by the year-end, sources in Sindh’s food department say.

Under this project, modern silos will be constructed at Karachi and Benazirabad, with combined storage capacity of 60,000 tonnes. This will help authorities make timely wheat procurement from growers, officials say, adding that after the completion of this project, construction of more silos will be initiated in other parts of the province.

In Punjab, too, a multi-grains silos project is underway. Provincial officials recall that a meeting was held in August to finalise requests for proposals and other modalities of inviting bids for this project. The meeting decided that the IFC, the private sector lending arm of the World Bank, will submit complete project proposals based on public-private partnership. After the approval of these proposals by provincial authorities, bids will be invited.

Both Sindh and Punjab are undertaking silos building projects with the IFC’s technical help that had conducted a study on Pakistan’s need for agricultural storage capacity building, back in 2010, and had also recommended these projects. Under the proposed action plan 22 concrete silos will be constructed with total storage capacity of 650,000 tonnes.

Both Sindh and Punjab are undertaking silo-building projects with technical help from the IFC, which had conducted a study on Pakistan’s need for agricultural storage capacity building, in 2010

Poor agricultural storage infrastructure, resulting in post-harvest losses, continues to take its toll on food security and depresses exports.

Pakistan Agricultural Supplies and Storage Corporation (PASSCO), a public sector entity, is responsible for maintaining strategic reserves of wheat, rice and sugar. The provincial food departments also have wheat godowns but their combined capacity is too small.

According to a SBP report, based on 2012-13 statistics, there is a huge gap between the public sector’s total storage capacity and the actual production of grains and fruits and vegetables. These estimates show that there is room for developing proper storage facilities for 16m tonnes of wheat (against total output of 24.3m tonnes), 4.4m tonnes of rice (against 5.5m tonnes), 4m tonnes of maize (against 5m tonnes) and 3m tonnes of potatoes (against 3.5m tonnes). These gaps remain largely untapped because currently storage facilities in the private sector are mostly outdated. That’s why post-harvest losses of grains range between 15-18pc and that of fruits and vegetables between 25-40pc, the SBP report reveals.

Lack of proper storage facilities also result in loss of additional food grains whenever heavy rains and floods hit the country. The recent floods are no exception.

Media reports say that wheat stocks at PASSCO warehouses and with the provincial food departments were partly damaged because in some cases the stocks were lying in the open and, in other cases, storage facilities were exposed to heavy rains and seeping of flood waters.

Thousands of tonnes of grains stored in old-fashioned mud-houses in farm fields and in large earthen barrels lying in courtyards of farmers’ houses were also either washed away or got wet and infested with pests.

“However, at some places in Punjab where the gush of flood waters was less-intense and where grains were stored in plastic or tin containers, or semi-concrete godowns the damage to grains was relatively low,” says an official of Punjab agriculture department.

Gaps in storage requirements and available facilities offer huge business opportunities for companies interested in this sector. From ready-to-install small steels silos to silo-bags there are many ways of expanding storage infrastructure, officials of provincial agricultural departments say. But they lament the lack of private sector’s interest in investing in storage facilities. Silo bags are specially designed hermetic bags that can store up to 60 tonnes of grains under such conditions that prevent infestation by squeezing oxygen levels.

Lately, some big landlords in Sindh and Punjab have started importing Chinese silo bags with prices ranging between $1000-10,000 per set depending upon their quality, storage capacity and the material used in manufacturing.

Scarcity of storage facilities has, overtime, given rise to godown and warehouse-renting. “We have warehousing sheds of 1000 square meters and more in Port Qasim area and we regularly rent them out for wheat, rice and sugar storage,” says Muhammad Anwar, manager of one of these warehouses. “Normally these sheds are taken on rent by importers and exporters. But during heavy rains or floods, landlords from interior of Sindh shift their stocks of grains or seeds into these sheds for protection.”

After the 2010 super floods, such global organisations like UNHCR and WFP had also used these commercial godowns and warehouses for storing food and other relief goods for onward distribution among the flood-affected people.

Published in Dawn, Economic & Business, October 6th, 2014