Sindh plans to start wheat procurement from March 15

Published December 5, 2021
SAKRAND: A farmer sprinkles fertiliser over a wheat field on Saturday.—Photo by Umair Ali
SAKRAND: A farmer sprinkles fertiliser over a wheat field on Saturday.—Photo by Umair Ali

HYDERABAD: Sindh’s food department plans to start procuring wheat from March 15 instead of its usual procurement exercise schedule that begins from the middle or by late April.

“We have serious plans to start the procurement drive by March 15 instead of April in order to capitalise on the early harvesting trend in the Mirpurkhas zone of lower Sindh,” Haleem Shaikh, the provincial food secretary, told Dawn on Saturday.

He agreed that starting the exercise in April affects procurement. The procurement target would remain unchanged at 1.4m tonnes for the upco­ming season as well, he said.

Last year, the food department managed to buy 1.2m tonnes of wheat against the procurement target of 1.4m tonnes.

The Sindh government fixed grain’s support price of Rs2,000 per 40kg last year, which has been raised to Rs2,200 this year.

Provincial government’s buying target expected to remain unchanged at 1.4m tonnes for upcoming season

Sindh’s food department has also started releasing wheat from its godowns at Rs4,875 per 100kg bag. Around 350,000 wheat is to be released by December and the remaining stock by March.

Last year, the Sindh government sought approval from the federal government for enhancing the cash credit limit (CCL) in view of an increase in the support price. The CCL of Rs130 billion last season was revised to Rs152bn in the outgoing season. It would be raised again in view of a higher support price of Rs2,200 this year.

Food officials claimed that the provincial food department has to clear Rs152bn liabilities of banks besides a markup of 7.8pc over the principal amount. Wheat releases are under way and the department anticipates recovering Rs78bn until March. The food department would require Rs75bn if the new procurement target is fixed at 1.4m tonnes. A tonne of wheat would be procured for Rs55,000.

Sindh Abadgar Board Vice President Mahmood Nawaz Shah pointed out that both federal and provincial governments should increase procurement targets for wheat for the coming year.

In the last two years, the only price controlling measure of the government was releasing its stocks, he said, adding that when the government had lower stocks, the private sector increased the prices. “Instead of importing wheat, it should be purchased from local farmers,” he said.

Meanwhile, wheat is being released at the rate of Rs48.75 per kg to chakkis (flour grinding units), which are selling flour at Rs70 to Rs75 per kg.

“We incur Rs16.40 per kg overhead cost on the conversion flour from grain. It’s also inclusive of Rs2 per kg profit margin on our part,” said Haji Mohammad Memon of Atta Chakki Owners Associations. He lamented that the government was until recently releasing 220kg wheat daily per store, which has now been reduced to 170kg.

As a result, wheat was purchased from the open market where 100kg bag was available at Rs6,000-Rs6,100 exclusive of overhead cost. “The administration wants us to sell flour at Rs60 per kilo which was clearly not affordable. We have urged the food secretary in a recent meeting to increase the daily release limit,” he said.

Meanwhile, the World Food Programme (WFP) is assisting the Sindh government in a feasibility study for setting up silos in the province. The study would be completed next week and shared with the food department. Currently, the department has a storage capacity of around 700,000 tonnes of grain in godowns.

WFP is likely to share the feasibility report on Monday with Sindh’s food secretary, reflecting the cost of a silos with a capacity of 10,000 tonnes.

Published in Dawn, December 5th, 2021

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