A few days ago, the Sindh cabinet approved the release of 1.265 million tonnes of wheat reserves to flour mills and chakkies at Rs3,800 per 40kg (maund) in an effort to stabilise flour prices. Meanwhile, the Punjab government has tightened controls on the interprovincial movement of wheat and flour through a restrictive permit regime to curb price hikes within the province. Despite these, wheat prices continue to rise across the country — a sign of mounting strain on the supply-demand balance.

Recent developments in the wheat sector have triggered a debate over whether existing stocks can meet national needs until March, when Sindh’s new harvest begins, or if wheat imports will be inevitable. The Pakistan Flour Mills Association claims that poultry and livestock feed mills have consumed over 1.6m tonnes of wheat in just four months after the harvest — using it as a cheap substitute for maize, the primary feed ingredient.

In response, the Punjab government imposed a ban on the use of wheat in feed production — a little too late — in September 2025. Many believe that this unusually high level of wheat consumption, which was prohibited last year, combined with stocks lost to recent floods, has now made the import of at least 1.5m tonnes virtually unavoidable.

In contrast, the federal minister for national food security and research assured the country had sufficient wheat stocks to meet domestic needs. This starkly divergent view stems from the absence of a transparent and credible system to track actual stock levels nationwide. The situation is even murkier this year, as most of the marketable wheat remains in private hands — both formal and informal.

Wheat prices soar as the supply-demand balance is under pressure amid the government’s continual claims of ‘sufficient stocks’

For instance, when the Punjab government imposed the ban on feed mills, it reported that mills across the province collectively held just 104,184 tonnes of wheat — a figure hard to believe, as it would barely cover their processing needs for 10 to 15 days. In reality, many of them had stocked wheat not only for their year-round consumption but also for speculative trading, as purchasing it at Rs2,000–2,200 per maund during the harvest season was nothing short of a windfall opportunity — one that many eagerly availed.

This year, not only flour and feed mills, but also a multinational trading company and politically connected wealthy individuals ventured into the wheat storage business in a big way — particularly in Sindh and Punjab. This surge in private hoarding was largely enabled by the government’s decision to let the private sector freely procure wheat during the harvest season, after opting to withdraw from procurement itself.

Now, with prices soaring and concerns mounting, the government seems reluctant — understandably — to acknowledge any wheat shortage in the country. Admitting it now and deciding to import would erode its credibility after repeated claims of “sufficient stocks”. Politically, this may not be the right time for a government already facing criticism on many fronts.

In addition, making an import decision barely weeks before the sowing season could demoralise farmers and discourage them from wheat sowing, leading to a reduction in the cultivated area. Memories of 2024 are still fresh, when the government imported 3.59m tonnes of wheat, which caused a market glut during the harvest season that led to a price crash.

Imported wheat — costing around Rs3,500–3,700 per maund — could upend the Punjab Government’s artificially maintained price cap of Rs3,000 per maund

Another key concern for the government is that imported wheat — costing around Rs3,500–3,700 per maund (after in-land transportation) — would upend the Punjab Government’s price cap of Rs3,000 per maund, which is artificially being maintained through coercive administrative measures. Moreover, wheat imports would place additional pressure on Pakistan’s already fragile foreign exchange reserves.

Against this backdrop, delaying imports under a “wait-and-see” approach may buy the government some time, but it risks triggering a supply crisis in the months ahead. Given the minimum 45-day requirement for wheat imports, it would be prudent to act now if there is any doubt about a potential shortage. Importing in November or December could help stabilise prices and avert market panic.

However, any delay until January or February could prove disastrous — consumers would face soaring prices amid tightening supplies, while farmers would see their upcoming harvests devalued by the sudden influx of imported grain.

In this policy misstep, the only winners would be the powerful stockists, who are waiting for the moment when government reserves (stocks) — the only buffer stabilising the wheat market — are depleted and prices spiral out of control. It would be the right time for them to offload their holdings at exorbitant prices long before the imported wheat arrives.

Food security is a matter of utmost national sensitivity, which cannot be compromised for political convenience. Equally, safeguarding the agriculture sector and protecting farmers’ livelihood is not a choice but a core responsibility of the state. Yet, regrettably, the government seems poised to repeat the same mistake witnessed in the sugar sector — making ill-timed import decisions that could leave farmers bearing the brunt in the form of depressed crop prices at the time of harvesting.

Khalid Wattoo is a development professional and a farmer, Dr Waqar Ahmad is a former Associate Professor at the University of Agriculture, Faisalabad.

Published in Dawn, The Business and Finance Weekly, October 13th, 2025