KARACHI, April 20: The looming wheat crisis over Sindh will dominate the proceedings of the wheat disposal committee meeting in Islamabad on April 24. Senior food officials are meeting in Islamabad to take stock of the current wheat situation amidst reports that the Punjab, the only wheat surplus province, has unofficially restricted the wheat movement to Sindh and Balochistan. But for some unexplainable reasons, Punjab is allowing wheat to go to NWFP.

Since Punjab is not allowing wheat to Sindh and Balochistan, the Karachi traders are focussing on farmers of their province, which is keeping the market hot and prices going up.

Prices of wheat are crawling up again in the open market restricting Sindh government's capacity to procure wheat from the farmers at the officially fixed rate of Rs875 for 100 kilogramme.

PASSCO has also entered Sindh for procurement and is offering Rs890 for 100 kilogramme to the farmers. Market watchers predict prices of wheat and flour going up again in Karachi and other parts of the province during next few days.

Sindh Food Minister Arif Jatoi, a strong believer in open market economy, had given a firm assurance on the floor of provincial assembly on April 7 that wheat and flour prices would stabilise in next two weeks. "The commodity brokers, traders and millers have joined hands to prove minister is wrong," a market analyst remarked in a bitter tone.

"Free market demands a close monitoring of the commodity, an effective regulatory framework and above all honest and competent regulators," the market analyst said who regret that "we have none." "Consumers were never so vulnerable and helpless as they are now," is another sarcastic remark.

Amidst all this confusion, the traders, millers and the commodity brokers are engaged in a head on with the Food Department officials and want all the official and unofficial restrictions on wheat movement to go.

Officials, on the other hand, want an outright ban on wheat movement. "Sindh is a wheat deficit province which needs almost two million tons of wheat in the current season to meet the demand," explained an official.

He said that it was necessary that the province should have about 1.2 to 1.3 million tons of wheat in the reserves and is therefore expected to demand on Saturday in wheat disposal committee at least 700,000 tons from the federal government. There is a proposal to formalise wheat movement restriction in the province through enforcement of section 144.

Enquiries reveal that Sindh government has managed to procure hardly 70,000 tons of wheat from the farmers in the current season. This procurement is better than that of last year when about 50,000 tons of wheat was procured in the corresponding period.

But officials say that procurement in the current season is distressing as the government fixed a procurement target of 0.6 million tons which looks unachievable. Trade circles reveal that banks have advanced more than Rs1.5 billion for commodity operations in last few weeks, which is also one of the factors for keeping the wheat prices high.

The State Bank's recent quarterly report has said that low interest rates on bank loans have led to speculative wheat trading. The Sindh government is reported to have asked the State Bank sometimes back to suspend commodity operation loaning to private sector at least during official procurement operations. Traders say that even a few of the bank officers in Sindh have taken loans to trade wheat.

Another reason for creating uncertainty in wheat trading is that the government has not come out with an issue price so far. The government increased procurement price to Rs350 for 40 kilogramme from Rs300 for same quantity.

But the issue price on which the government will give wheat from its stocks to millers is awaited. Brokers and traders are hoarding wheat in anticipation of at least Rs60 to Rs80 increase in issue price of wheat.

Speculative trading of wheat is going on in full swing in the province although under Food Control Act 1958 the food department has all the powers to check on wheat stocks of growers, traders and millers. The Sindh Food Department has no capacity, resources, skill or will to monitor wheat stocking with the traders and brokers.

Then there is a transport mafia. This mafia thrives on wheat transportation from Punjab to Sindh and has a vested interest in wheat shortages and crisis in the province. The National Logistic Cell arbitrarily increases the freight. This government is committed to privatization of all state-owned assets. But it has so far overlooked NLC.