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ISLAMABAD: A meeting of the Economic Coordination Committee (ECC) of the Cabinet has allowed the import of an additional 620,000 metric tons of wheat on government to government basis from Russia, after approving Rs1,600 per 40kg as minimum support price (MSP) for 2020-21 following an increase of Rs200.

Sources said that the ECC meeting presided over by Adviser to the Prime Minister on Finance, Dr Abdul Hafeez Shaikh has decided that the government would import 800,000 metric tons of wheat from Russia on government to government basis and as 180,000 tons has already been imported, 620,000 metric tons additional would be imported.

Sources further revealed that another proposal to provide Rs1,000 as subsidy against fertiliser was expected, however, it could not be presented to the ECC. On a proposal of the Ministry of National Food Security and Research, the ECC decided to enhance initial allocation of wheat import by Trading Corporation of Pakistan (TCP) from 1.5 million metric ton to 1.8 million metric ton to cater for the additional requirement of the KP and Sindh demand for shipment by mid-February.

The meeting further decided that that 300,000 metric ton MT of wheat would be imported on G2G basis from the Russian Federation by the PASSCO. The ECC endorsed another request of the Ministry of Food to import another 320,000 from Russia under the government to government (GTG) arrangement but constituted a secretaries-level committee with the secretary Finance, Commerce and Food Ministry to look into the possibility of import of wheat either by the PASSCO or the TCP.

The tendering of wheat may be stopped, and the TCP should make efforts for G2G arrangement for additional procurement of wheat, the meeting decided, and in view of the arrival of the new crop in March 2021, the decision was taken that no vessel of imported wheat should be arranged either in public or private sector beyond February 2021.

On MSP for wheat, the ECC was informed about the importance of wheat support price mechanism to encourage increase in production, increase in profitability for the farmers and to stabilize the market. The meeting was further informed that since 2010-2011, MSP for wheat has been increased four times and new price is close to the price of Rs1650 recommended the largest producer Punjab.

On wheat import by the Trading Corporation of Pakistan (TCP), the ECC was told that till January 2021 the TCP would be able to secure one million metric tons of wheat through international bidding. An official said that the meeting was updated about the 29 vessels of TCP wheat with four vessels in October, 12 vessels to arrive in December 2020, and 13 vessels in January 2021.

The ECC also decided to release 50 percent of the tariff differential subsidy to the Power Division from earmarked Rs140 billion for 2020-21, and released Rs65.8 billion demanded by the Power Division will be used for payments to the power producers in order to maintain adequate liquidity.

On the summary moved by the Ministry of Industries and Production for the determination of gas rate for operations of Fatima Fertilizer and Agritech, the ECC decided that gas rate of Rs (PKR) 772/MMBTU with variable contribution margin at 186 per bag may be offered to both the units for the period 3rd November 2020 onwards.

The government share at this gas rate has been estimated by the NFDC on the basis of the RLNG's last notified rate for July by the OGRA, which is approximately 0.42 billion, the meeting was informed that actual payment by government for price differential sum to SNGPL may vary due to difference in monthly rate of RLNG.

The ECC granted approval for the sale of surplus power available at the incremental rate of Rs12.96/kwh to all industrial consumer categories, excluding zero-rated industrial consumers, on the incremental consumption over their respective historical consumption or established benchmark.

The meeting formed a committee consisting of Dr Ishrat Hussain, Dr Waqar Masood, Federal Minister for Industries and Production Hammad Azhar, Federal Minister for Power Omar Ayub, Special Assistant to PM Nadeem Babar, and SAPM Tabish Gohar to prepare a proposal to include K-Electric in the package.

The Committee will also propose whether the package shall continue for one year or three years. The Committee will also analyse the need for any subsidy that will be involved in the package and source for arranging the same, and all the issues that may come up in the calculation and distribution of that subsidy.

Copyright Business Recorder, 2020