LAHORE, Aug 3: The Punjab government is exerting pressure on the federal government to import around 1 million tons of wheat before it is “too late.” According to sources in the Punjab Food Department, Chief Minister Pervaiz Elahi is himself taking up the issue because of a “potential disastrous social and political impact” that the wheat shortage could trigger in the province.

They claimed that the Punjab had placed a demand for 800,000 tons of wheat with the federal government and stated that it did not take administrative measures to block wheat trade and shore up its stocks during the procurement season.

It did so because of the federal government’s assurance of meeting a shortfall through import. Punjab was able to procure only 2.4 million tons of wheat in spite of better crop this year, they said.

It was the federal government’s commitment to donors to keep the wheat trade free to which the Punjab agreed, they said. They claimed that the federal government was, however, now reluctant to import wheat because of its own calculations. The federal wheat commissioner was maintaining that the country produced over 21 million tons of the product and it was sufficient to meet the domestic needs.

“The claims and calculations appear right on paper, but in fact they do not stand a reality check. Last year, the private sector had around 1.2 million tons of wheat compared to the official stocks of 2.4 million tons,” according to an official of the food department.

It was able to hoard that wheat for weeks and made windfall profits with slow release to market. The flour price fluctuated by Rs18 a kilogramme last year despite the fact that the federal government was importing wheat and the provincial administrators raiding hoarders’ stocks. The State Bank of Pakistan, too, was demanding its commodity finance back. These aspects could not, however, make hoarders release their stocks.

This year, the private sector has procured around 2.2 million tons and it could wreak havoc on the market if not checked. Ruling out effectiveness of the administrative steps against hoarders, the Punjab government wanted to compete with hoarders by increasing stocks. The only possibility was import and flood market, which would psychologically force hoarders to release their stocks.

The federal government, said the sources, had allowed private wheat import and was banking on private parties to do the job. Punjab had been arguing that the private sector had historically not been able to import more than 300,000 tons of wheat. Punjab and Sindh had jointly demanded around 1.2 million tons of wheat. In no way could the private sector arrange that quantity and solve the problem as it had only been able to import 50,000 tons of wheat so far, they said.

The economic feasibility of wheat import was limited to Karachi only as the upcountry transportation charges had rendered it a profitless business. The federal government’s hope of a trickle down effect of Karachi import in the rest of the country was not a realistic one.

“It is not only wheat import that matters,” claims an official of the Punjab Flour Mills Association. He added that the timing of import and its distribution were equally important and only the federal government could ensure that.

The private sector would import for profits and only further strengthen its stocks as a result of which the problems would worsen, he said.

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