LAHORE, May 28: The wheat procurement drive by the Punjab Food Department seems to be coming to an early end with daily arrivals dropping to as low as 13,000 tons contrary to general expectations that suspension in wheat export will improve procurement.

The department has so far procured 2.44 million tons. The drive, officials think, will terminate around 2.55 million tons, which will be around 1.5 million tons less than the last year’s stocks of 4 million tons.

An official said though gunny bags for around 200,000 tons were still with farmers, their return (to the department) was unlikely. This situation will leave the department with 2.6 million tons if a carryover of 100,000 tons was also included.

A senor food official requesting anonymity admitted that hopes of additional supplies of wheat had been dashed. “Yes, the department has been hoping that the exporters will release wheat in the domestic market after government’s decision to suspend exports but it has not been the case. The market is now drying out quickly. Keeping in view the current trend, the procurement should end in the next few days,” he said.

Agha Muhammad Yamin, a wheat trader, said last year the department had 4 million tons of stocks and it released around 3.9 million tons. “This year the department will face more pressure because of inadequate stocks and small purchases by the millers.”

The millers, he said, had not procured wheat this year because of high mark-up rate on bank loans. “Now, they will start demanding wheat from the department much earlier than traditional month of October. And if the government starts releasing its stocks early, it will run out of stocks by December if the country’s requirements are any yardstick.”

In that scenario, Yamin believed, the government would either be importing wheat or risk price spiral. In the latter case, he added, the millers would hike flour price creating crisis for the government

Muhammad Jamal, another wheat trader, said hoarders were not expected to release wheat because they would be calculating market trends based on previous year’s stocks. “The hoarders and exporters know that the Food department does not have enough stocks and the wheat price is bound to go up. Thus, the millers will have to purchase wheat from the open market to supplement grinding, which will increase wheat price.”