THE area under wheat is likely to increase owing to the timely harvesting and crushing of sugarcane by all sugar mills this winter. A low per acre wheat yield productivity, however, cannot be ruled out owing to the delayed onset of the season.

The Sindh agriculture department expects that the wheat sowing target of 1.150m hectare will easily be met this rabi season. Even last year, the area under wheat crop slightly exceeded 1.154m hectares against the target of 1.150m

hectares. Growers expect an increase in the area under wheat cultivation if timely cane crushing takes places, but do not rule out lower per acre yield.

Late wheat sowing continued until the last week of December in upper Sindh. One cycle of irrigation water supplies has been used by wheat growers. But there is a possibility that growers would face water shortage in February and March, when the second and third cycles of water flows are required.

The Sukkur Barrage that feeds a huge command area of its seven major canals would be closed for annual maintenance from January 6, followed by the Kotri Barrage on December 25. “We will be able to assess the water situation afresh only when our canals reopen after maintenance. Presently, we are given to understand that a 20pc water shortage is likely in canals in the middle and fag end of the rabi season”, says a Sukkur Barrage official.

The Sindh food department wants to keep last year’s wheat procurement target — 1.1m tonnes — unchanged given its limited storage capacity. On the other hand, it faces financial constraints for payment of mark-up on loan obtained from the State Bank of Pakistan every procurement season

Water shortage on Dec 27 increased to 7pc from 4pc on Dec 26, as recorded at the Sukkur Barrage owing to the overall shortage in the system. Flows in canals have stopped at the Kotri Barrage, where wheat is largely grown in command of its four canals.

In terms of procurement, the provincial food department has come up with three different targets of procurement i.e. 1.1m, 1.2m and 1.3m tonnes along with respective credit financing requirements for each target. The food department currently has a stock of around 900,000 tonnes of wheat in its godowns. The carryover stocks will be 300,000-350,000 tonnes of wheat before the arrival of the new crop.

The support price of Rs1300/40kg remains unchanged for 2016-17 season. A senior food department officer says given the international market trend, the procurement price for Sindh is high.

The federal government is said to have provided $120 per tonne rebate for export of wheat and the latest information available with a Sindh food officer is that Punjab is going to float an international tender for its wheat stocks’ sale. Punjab is likely to have a carryover stock of 2.5m tonnes as it starts fresh procurement for the 2016-17 season.

During the current season, Sindh was allowed to export 300,000 tonnes of wheat for which the provincial government is said to have shared an equal amount of $60 per tonne rebate with the federal government, whereas Punjab chipped in with a cost of $50 per tonne rebate against the federal government’s $70 rebate per tonne.

Punjab would wait for rates offered in response to the said tenders and then it could be seen whether the Sindh government is comfortable with selling its stocks too. According to a Sindh food department official, the province would decide on selling its crop at the same rate so that the new crop could be procured.

The food department of Sindh wants to keep last year’s wheat procurement target — 1.1m tonnes — unchanged given its limited storage capacity. On the other hand, it

faces financial constraints for payment of mark-up on loans obtained from the State Bank of Pakistan every procurement season.

The Sindh government, however, may be willing to increase its procurement target as 2017 would in fact mark the beginning of activities for the next general elections.

Published in Dawn, Business & Finance weekly, January 2nd, 2017, 2016