LAHORE: In a run-up to this year’s wheat procurement campaign – that starts on April 20, the food department has started distributing gunny bags and plans to distribute 50pc of them in the first 10 days.

The department has set a target of four million tonnes for the season against the federally assigned 4.5 million. The federal government had promised to procure 6.9 million tonnes and asked Punjab to purchase 4.5 million tonnes, Passco another million, Khyber Pakhtunkhwa 300,000 and Balochistan 100,000.

According to department officials, the target was lowered for two reasons: heavy carry-over stocks and assessing market behaviour.

“Punjab is starting the season with a huge carry-over of 2.7 million tonnes,” an official said.

Gunny bags distribution begins

Managing these carry-overs is a herculean task; it means the entire indoor storage of 2.3 million tonnes is consumed and around 400,000 already in the open. If another four million tonnes is added to it, one can imagine the administrative stretch the department has to cover – it would be managing 6.7 million tonnes of stock.

However, the situation may turn nightmarish for the department if it has to increase the target; in that case the final figure will be over seven million tonnes. And the department is not ruling out that increase because of uncertain, at least so far, crop size, he added.

According to field reports so far, the crop size might touch the figure of 20 million tonnes, against the official target of 19.5 million because of healthy grain size. Field formations of the food department are warning it against such a possibility.

“Although wheat harvesting has still not started in the province except for a few pockets in the south, early reports suggest heavy, if not record, crop size,” explained another official.

Grain size is very healthy, which could impact the final yield positively. That is why the department is keeping its fingers crossed and waiting for the market to shape up before deciding about increasing the target.

He added: “However, it would be highly risky, both infrastructurally and financially, if it has to raise the target and go beyond seven million tonnes, which has never happened in the past. It is literally praying that wet weather delays harvest by a few weeks and the department is able to release some of its stock to bring the final figure down. But if that does not happen, the department, and the Punjab government by extension, will be in for a big trouble.”

According to departmental planning, it wants to distribute 50pc of the gunny bags in first 10 days – by April 25 – in order to stabilise the market on the higher side. Currently, wheat is being sold at Rs1,200 per 40kg; with 50pc gunny bags in the field, the department hopes to raise it to the official level of Rs1,300 per 40kg.

Though district coordination officers concerned are to plan start of actual procurement according to their local conditions any time on or after April 20, but formal distribution of gunny bags started on April 15 and procurement has been fixed from April 20. Central Punjab is still under a cloud cover with forecasts of rain on Sunday (today), which may delay harvest further depending on the weather.

If the wet spell continues returning with short intervals, as has been the case so far, individual districts may experience some delay in procurement. Early high moisture content has always been a deterrent for the department because it makes storage even harder.

Published in Dawn, April 17th, 2016