ISLAMABAD: Ministry of National Food Security & Research is said to have asked Trading Corporation of Pakistan (TCP) to scrap current wheat import tenders as the price quoted by importers is "too exorbitant", official sources told Business Recorder. On September 17, 2020, Ministry of National Food Security and Research noted that ECC of the Cabinet in its meeting held on July 15, 2020, allowed Provincial Governments, PASSCO and Trading Corporation of Pakistan to invite tenders/bids for import of wheat in the country, in addition to the private sector.
Subsequently, on the direction of the Prime Minister's Office, a summary for the Cabinet was submitted by the MNFS&R. The Cabinet in its meeting, held on August 04, 2020, allowed TCP to import 1.50 MMT of wheat on behalf of PASSCO, Punjab and KPK by waiving off all federal duties and taxes.
On the direction of the Federal Cabinet, TCP floated international tenders and shared their outcome with the MNFS&R on price and quantity. The provincial Governments were contacted for obtaining their endorsement of demand, which included 0.50 MMT for PASSCO, 0.70 MMT for Punjab and 0.30 MMT for Khyber Pakhtunkhwa. However, Punjab requested imported wheat @ Rs.1400/- 40 kg, which was not agreed by the Finance Division. The matter was submitted to the ECC, which on August 21, 2020 allowed TCP to import 0.20 MMT on behalf of PASSCO and directed Khusro Bakhtiar, Minister Economic Affairs Division and MNFS&R to contact Provincial Governments for obtaining their fresh endorsement on the basis of price indicated estimated by the TCP. Later on, KPK and Sindh endorsed the quantity of 0.150 MMT of imported wheat each through TCP. However, Punjab did not respond.
Ministry of National Food Security and Research further stated that recently TCP had awarded tenders of imported wheat for the quantity of 0.330 MMT, at price of Rs.42,554/- ton or Rs.1702/-40 Kg. During a weekly National Price Monitoring Committee meeting, headed by the Prime Minister, MNFS&R was directed to submit a new summary to the ECC for import of 1.5 MMT, wheat as approved earlier by the ECC. Concurrently, the import of wheat on G to G basis, with the Russian Federation was also under way, PASSCO has been nominated as procurement agency on behalf of Government of Pakistan to negotiate terms and conditions with the Russian side to import a minimum quantity of 0.20 MMT of wheat.
Pursuant to the ECC decision of June 10, 10 2020, DPP had issued import permit for 1.5 MMT to private importers. With the addition of expected wheat import of 1.574 MMT by the TCP and 0.2 MMT on GTG basis, MNFS&R was of the view that in case the aggregate quantity of imported wheat by the private sector, TCP and on G2G basis exceeded 0.2 MMT, this may have a negative impact on the upcoming wheat cultivation due to anticipated decrease in the local prices and glut of wheat may also affect the minimum support price mechanism.
Ministry of National Food Security and Research requested the ECC to allow 1.5 MMT import of wheat through TCP immediately, as decided earlier by the Federal Cabinet in its meeting held on August 04, 2020. The incidental charges of TCP over and above the MSP of wheat will be picked up by the respective provinces and in case of PASSCO, the Finance Division.
The ECC re-iterated that the matter was very important with reference to price stabilization vis-a-vis maintaining strategic reserves of wheat in the country. Minister for National Food Security and Research (MNFS & R) stated that as against the allowed import figure of 1.5 MMT, an aggregate quantity of 2.2 MMT may be required to be imported. However, the forum observed that no authentic data was available to ascertain actual requirement of commodity.
The Chairman observed that input from Government of Punjab was vital for assessment towards finalizing the requirement. Therefore, Secretary Food Department, Government of Punjab was contacted on telephone who informed the forum that their demand of 0.70 MMT was necessary. However, he expressed inability to give any commitment for a decision on price differential at that moment. The meeting observed that the matter of price differential should be settled by MNFS&R in consultation with the provincial governments.
It was noted that private sector had procured 0.790 MMT of wheat. TCP was in process of procuring 0.330 MMT whereas 0.20 MMT was also in the pipeline from the Russian Federation under G to G arrangement.
During a discussion, it was stated out by the TCP that the rate offered in the latest tender opened by TCP for procurement of 150,000 ton of wheat is $ 274 per ton while the last tender was opened at the rate of $ 233 per ton. Ministry of National Food Security and Research argued that the offered rate is too exorbitant and this tender should be scrapped. The forum maintained that it is a routine decision, which should be taken by the concerned Ministry in consultation with TCP.
The ECC accorded approval for import of 1.50 MMT of wheat through Trading Corporation of Pakistan and decided as under: Ministry of National Food Security and Research is to ensure necessary measures for maintaining necessary strategic reserves of wheat in order to meet its shortage and to stabilize its price in the country. Ministry of National Food Security and Research /TCP to proceed with import of wheat immediately for Punjab, KPK and PASSCO in consultation with the concerned stakeholders i.e. as per the following ;(i) Punjab - 0.70 MMT, through TCP;(ii) KPK- 0.30 MMT( through TCP) and ; (iii) Passco - 0.17 MMT.
The ECC also directed respective provincial governments to sign an agreement with TCP according to which TCP processes tendering. Ministry of National Food Security and Research was to engage the Russian Federation for procurement of 0.200 MMT of wheat on G to G basis. Pakistan Embassy in Moscow may also be approached for expediting the deal without any delay.
Copyright Business Recorder, 2020
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