LAHORE: The Punjab Food Department (PFD) has set the wheat procurement target for the upcoming season at 3.5 million tons equal to the revised procurement target of the year 2021.
“We have moved a summary to the government in this regard and a final nod is awaited from the provincial cabinet committee,” said Director Food Punjab Dr Omar Jahangir while talking to Business Recorder on Wednesday.
Dr Omar said last year the procurement target was initially set at 5 million tons which was later revised down to 3.5 million tons.
He said all the paper work for the procurement drive is final and the department will need some Rs190 billion to Rs209 billion to perform this operation amicably. But the budget depends on the support price. “If it remains unchanged at the present rate of Rs1950 per maund then we will need around Rs190 billion and the need may increase if there is an increase in this price,” Dr Omar added.
To a question, he said there are proposals to upward revision of the support price as historically wheat price is fixed at a level where its smuggling could be discouraged. He claimed that present support price is lower than the prevailing international price. However, a final decision from the centre is still awaited in this regard. He termed the huge price difference between the local and international markets had not been witnessed since 2011-12. “During the last decade, local wheat prices remained higher than the international market except once when rates in both the markets were equal.”
The Director Food said that gunny bags procurement arrangements have also been finalized and as compared to last year he had received higher rates for Jute bags while negotiated PP bags at the cheaper rates than the past ensuring a saving of around Rs1 billion on procurement of the bags. He said that PP bags are being purchased over Rs12 per bag lower than the past year’s negotiated rates. He said that earlier the department was storing grains in these bags with a ratio of 60:40 but due to higher rates of jute bags this ratio has been changed to 75:25, making storage of procured wheat only in 25 percent of the jute bags.
Dr Jahangir claimed both the federal and provincial authorities had agreed in principal to increase the minimum support price of wheat to match it with the rates given by the Sindh government but a final notification is yet awaited. Sindh has fixed Rs2200 per maund as the support price against Rs1950 per maund set by the Punjab for the 2021-22 seasons. The Punjab Food Department had also moved a summary to increase the Punjab rate as a measure to check movement of wheat out of provincial borders.
Responding to a query, Director Food said that the department had sufficient stocks till June 2022 and it would be enough to keep flour and wheat prices stable in the province.
The food director takes credit for reducing wheat prices in the open market at the end of the wheat season unlike in the past when prices usually shot up with the drying up of the grain markets.
Copyright Business Recorder, 2022
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