KARACHI, Oct 29: The State Bank of Pakistan in its report released on Monday has endorsed government’s estimate of harvesting 23.5 million tons of wheat this spring. This endorsement is a disapproval of assessment given by the flour millers and traders who had questioned estimate of wheat production given by the government when there were shortages in late August.

Wheat harvest, according to SBP report, was 10.3 per cent higher in 2007 as over 2006 when it declined by 1.4 per cent to 21.3 million tons.

Pakistan imported wheat in the year 2005-06 when 21.3m tons of wheat was produced but opted for export of 0.5 million tons in December 2006 from a carryover stock of about 4 million tons.

But in the current season when a record bumper crop of 23.5 million tons was harvested, the Economic Coordination Committee decided in September to import one million tons.

The SBP report endorses government estimates of 23.5 million tons of wheat production but is silent on the conditions that led to decide for import.

The report is also silent as to why wheat supply is scarce in October 2006 and price of flour is touching Rs22 a kg in many parts of the country.

In its annual report for 2005-06 released on Dec 2 last year, the SBP anticipated harvest of a bumper wheat crop a few weeks later in spring.

The SBP had then advised the government to build up a strategic reserve before deciding to export.

The report had then warned that if any decision to export wheat is taken before a strategic reserve is built up in the country, the speculators, hoarders and profiteers will take control of the market.

The government decided to export from carry over stocks in December 2006 and then also allowed export from new crop in the spring before the official agencies could procure targeted quantities. It happened exactly the way, the SBP predicted. The speculators, hoarders and profiteers are in control of wheat market since April last year and wheat flour is being sold at Rs22 a kg in many parts of the country in the last week of October.

The federal ministers and special secretary of finance announced on many occasions of having with them the names of speculators and hoarders in Punjab and Sindh.

At one time it was said that hoarders were having stocks of two to three million tons with them. Open threats of carrying out raids on illegal stockists were made by the ministers and the bureaucrat. No raid was ever made.

Federal Industries Minister Jehangir Tareen blamed Punjab government for giving hoarders and profiteers a free hand by delaying the decision to release wheat from governments stocks till mid-September.