LAHORE, April 25: The Punjab government is awaiting the levy of import duty on wheat, as crop arrival at its procurement centres has started to gain momentum amid growing fears of price crash.

Sources in the Punjab food department say the summary has been placed at the prime minister’s table and all eyes are on him now. The imposition of import duty on wheat is increasingly necessary, as wheat threshing has assumed greater momentum and is expected to create massive glut in the market during the next 10 days.

The pace with which the arrival had suddenly picked up could be gauged from the fact that it had jumped from 10,000 ton on Sunday last to 37,000 ton on Monday — a jump of 27,000 ton in one day. This trend would not only carry on during the next few weeks but gather more pace, they said.

They said almost 70 per cent of the crop had been harvested in the central part of the province and now threshing had started. The southern part of Punjab had already harvested and threshed almost entire crop.

In these circumstances, they said, the wheat glut would assume a threatening proportion in a week or so.

That would be the point where the federal and provincial governments would have to take tough decisions, as Punjab was increasing its procurement target and the centre imposing import duty, they said.

“The federal government will perhaps be waiting for the price crash to begin to impose import duty because it will have to justify its decision before the donors,” according to an official of the Ministry of Food, Agriculture and Livestock (Minfal).

In the 45-day procurement campaign, this kind of brinkmanship could prove to be a dangerous game in which the farmers would be the ultimate losers, he said. And it would entail a huge political cost in the election year.

A food department official said the department, in addition to ensuring wheat price for farmers, had to deal with unscrupulous private sector. With wheat price in the open market pressed lower than the officially-declared price of Rs415 per 40kg, the private sector could now purchase wheat from growers at a lower price and resell it to the department, converting the differential which was growing by the day, into immediate profit.

“The situation has accentuated the departmental role; it has been finding it hard to ensure price and now it is wasting energy on checking the private buyers,” he said. The market discrepancies, which the government itself created in the last few weeks, could only be removed by imposing import duty and increasing procurement target by Punjab, according to a city trader. But, in both decisions, time was of essence which could force private sector back to buying. Otherwise, the private sector would remain out of market and press the price further down.

He said the private sector from the NWFP and deficit districts like Rawalpindi and Gujranwala had already purchased wheat from Bahawalnagar and Rajanpur districts. Massive wheat from other districts would now create equally big glut in the market where there was no buyer.

The private sector purchased wheat at an average price of Rs370 from southern part and it would wait till price tumbled even down that mark.

At the current interest rate, millers would have to pay Rs10 per 100kg bag a month as bank interest and five-month storage would raise the price by Rs50. They would definitely try to make up for the loss from depressed price, he said.

According to another wheat trader, the only hope for farmers, as already reported, is that the crop size drops substantially and the price does not fall beyond a certain point. —Staff Reporter