ISLAMABAD, Nov 19: The federal government has decided in principle to avail $95 million of US-government funding to import 0.5 million tons of wheat through international tenders to meet the country’s food requirement during the fiscal year 2003-04 and stabilize domestic prices.
A senior government official told Dawn that the Economic Coordination Committee (ECC) of the cabinet was expected to formally empower the ministry of food and Passco to utilize this $95 million credit line (GSM-102) offered by the US government for commodity procurement.
The ECC meets here on Thursday under the chairmanship of Finance Minister Shaukat Aziz.
According to the summary sent to the ECC, the decision to import 0.5 million tons of wheat was taken by the Wheat Disposal Committee (WDC) recently, after having estimated 0.638 million tons of wheat shortfall during the current fiscal year.
The ECC has been informed that total public sector wheat stocks as of November 19 stood at 3.21 million tons against the estimated consumption of 3.8 million tons during the remaining period of the current fiscal year, which has been calculated on the basis of 2.5 per cent increase in annual population.
Pakistan’s annual wheat consumption is around 20m tons. Crop output during the year was estimated at around 19.2m tons.
The WDC has pointed out that the private sector had reasonable stocks of wheat, but warned the government not to expect the private stockists to release their stocks at the time of shortage. “Rather they would use the opportunity to make profit that would further increase domestic prices.”
Sources said the WDC had released 50,000 tons of wheat to NWFP and 30,000 tons to Sindh from Passco’s stocks early this month. Still, NWFP and Sindh will face a wheat deficit of 0.15m and 0.27m tons, respectively.
The ministry of food, agriculture and livestock has urged the government to withdraw 25 per cent import duty on the commodity to reduce C&F cost. It said the entire wheat import operation should be supervised by a wheat committee led by the food minister and comprising the finance minister, secretary communications and agriculture secretaries of Sindh and NWFP.
Under the plan approved by the WDC, the deficit provinces (Sindh and NWFP) would work out their need, methodology for shipment and lifting schedule. However, international tenders would be floated by Passco, while the food ministry would also directly approach the wheat exporting countries through Pakistani missions abroad.
Under the plan, the federal government would provide import subsidy for domestic and C&F prices, while incidental charges from the port of shipment to the destination would be borne by the respective provinces.
The sources said the total procurement of wheat in the public sector during the current fiscal year amounted to 4.5 million tons, including carryover stocks of 0.99 million tons. During the period from May to November 2003, the provinces have released 0.852m tons to the floor mills.