KARACHI: Pakistan has imported over six million tonnes of wheat from July 2020 till September at a cost of over $2 billion to bridge the demand and supply gap in view of short local production.
Total imports stood at 3.162 million tonnes valuing $983 million in FY21 as compared to 2.206m tonnes costing $795m in FY22, while the grain imports stood at 856,813 tonnes amounting to $408m in 1QFY23, data of Pakistan Bureau of Statistics (PBS) showed.
The average per tonne price (APT) rose to $360 in FY22 from $272 in FY21. In IQFY23, the APT further rose to $477.
As per the Sensitive Price Index (SPI) data, the 20kg flour bag price was ranging between Rs1,295-2,200 while it was Rs980-1,700 in June and Rs1,000-1,140 in June 2020.
The SPI price trend shows that the flour bag price did not witness any steep decline despite huge wheat imports.
When Chairman Pakistan Flour Mills Association (PFMA), Sindh Zone, Aamir Abdullah was asked to give a rationale for wheat imports amid the country’s foreign exchange crunch, he said “imports were inevitable to keep pressure on hoarders besides averting any further jump in flour prices.”
In case no imports were made, the hoarders and market mafias would have taken control by issuing the grain on further demand and supply gap taking the flour price beyond the purchasing power of many people, he said.
When asked if smuggling was one of the main factors in putting pressure on locally produced wheat and its prices, he said it has been a historic trend that wheat, flour, rice, ghee/cooking oil and sugar had been finding their way to Afghanistan.
Whenever wheat and flour shortages emerge, reports start emerging regarding wheat and wheat flour smuggling to the neighboring country, he added.
Mr Aamir said flour prices had been on a downward trend after the release of wheat by the Sindh government. Flour price no 2.5 has been decreased to Rs96 per kg from a peak Rs110 while fine and super fine flour rates came down to Rs105 from Rs125 in the last two months.
He said the open market rate of wheat has plunged to Rs8,300 per 100 kg bag from Rs9,400 in the last two months. The Sindh government is providing subsidised wheat at Rs5,825 per 100 kg bag to the millers. The provincial government had also fixed 10kg flour bag subsidised price at Rs650 in September.
As per Economic Surveys in the last few years, wheat crop in FY20 was 24m tonnes which swelled to 27m tonnes in FY21 but fell to 26.4m tonnes in FY22.
Published in Dawn, November 9th, 2022