The International Monetary Fund (IMF) may have some concerns over borrowing from banks for wheat procurement, as it would compromise liquidity available for the private sector, an official said. The Economic Co-ordination Committee of the Cabinet (ECC) has recently approved Rs 164.798 billion bank guarantee for procurement of 6.57 million tons of wheat which an official of the Finance Ministry said IMF believes would squeeze credit for private sector.
Sources said that previous year's outstanding against provinces and PASSCO on account of commodity operations are Rs 293 billion. Provinces and PASSCO had borrowed Rs 196 billion for procurement of wheat, Rs 44 billion for sugar, Rs 37 billion for urea and Rs 15 billion for rice. The amount borrowed from the banks was stuck up from last year because wheat could not be exported as price of the commodity was relatively low in the international market as compared to domestic market.
Now the position is easing and provinces may be able to export some wheat because of a rise in its price in the international market. Well placed sources said that total outstanding against Punjab and Sindh for financing of commodity operations stood at Rs 122 billion and Rs 14 billion, respectively for last year. The outstanding against PASSCO and TCP on this account is Rs 62 billion and Rs 94 billion for last year.
The provinces who are already holding wheat stock of Rs 195 billion would require Rs 130 billion for procurement of 6.57 million wheat in 2011. They said Punjab would require Rs 83.475 billion for procurement of 3.5 million tons wheat, Sindh Rs 30.333 billion to procure 1.3 million tons, Khyber Pakhtunkhwa would need Rs 10.524 billion to buy 0.4 million tons of wheat during the rabbi season. Balochistan would require another Rs 130 billion for procurement of 6.57 million tons for the current season. Giving credit line to any sector by the State Bank of Pakistan would not be viable option because this would be inflationary.
Comments
Comments are closed for this article.