Rs201bn cash credit limit: ECC approves procurement of 1.8 MMTs of wheat by Passco

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet Wednesday approved the procurement of 1.80 MMTs wheat by the Passco with a cash credit limit (CCL) of Rs201 billion at procurement price of Rs3,900 per 40-kg.

On a summary moved by the Ministry of National Food Security and Research, the ECC meeting presided over by Finance Minister Ishaq Dar approved the wheat procurement target.

The ministry said that the Passco procures wheat from Punjab, Sindh, and Balochistan, and provides to deficit provinces/areas and agencies. It is also responsible for maintaining the strategic reserves of the country. Procurement takes place on the announced minimum support price (MSP) as per targets assigned by the federal cabinet.

Punjab approves wheat purchase policy

On 02-03-2023, the Passco reported public wheat stocks of 1,552,010 metric tonnes. With the remaining import of 612,103 metric tonnes, out of the approved import of 2,652,538 metric tonnes, the total availability with the Passco would be 2,164,113 metric tonnes.

The meeting was informed that the projected release from the Passco’s stock is estimated at 638,848 MTs, leaving behind carry-forward stock of 1,325,265 MTs at the start of the new food year on 01-04-2023.

The Passco through a letter on 02-03-2023 has informed that the pending liabilities of the Passco on account of provincial governments, strategic organisations, and food departments of the AJ&K and the GB are reported at Rs110.092 billion. In order to procure local wheat and to meet the assigned target of 1.80 MMTs, a tentative CCL of Rs201 billion at a procurement price of Rs3,900/40-kg would be required. This amount constitutes Rs175.5 billion for the purchase of local wheat, whereas, the remaining Rs25.5 billion would be utilised on account of incidental charges and the purchase of bardana etc.

Last year, the Passco was assigned a procurement target of 1.20 MMTs, however, on the direction of the PMO, the target was enhanced to 1.70 MMTs.

The Passco’s wheat procurement during the last 10 years is given as Annex-D. For ensuring procurement of strategic reserves and stock for recipients of Passco, Government of Punjab has been requested to assign additional 16 Tehsils for procurement.

Wheat crop harvesting has already started from southern Sindh.

Provincial Crop Reporting Services (CRS) have reported wheat crop sowing on 02-03-2023 at 21.94 million acres or 96 percent of the target area. The shortfall is due to crop substitution in Punjab and less sowing in Sindh due to standing water of rains and floods.

Additional demand of wheat from Passco’s stock from Punjab, Sindh, Khyber-Pakhtunkhwa and Balochistan, minimum level of carry-forward stocks and prevailing pricing trend in the local wheat market, the MNFS&R recommends that Passco may be assigned wheat procurement target of 1.80 MMTs with the tentative CCL for Rs201.00 billion @ procurement price of Rs3,900 per 40-kg. Further, the ECC directed the MNFS&R to form a committee to review the proper wheat usage, wheat storage mechanism/silos in the country and present its findings to the ECC in 15 days.

The ECC considered a summary of the Ministry of Inter-Provincial Coordination and granted technical supplementary grant of Rs10 million for the medical treatment of Jan Sher Khan, ex-world squash champion, diagnosed with multiple health issues.

Copyright Business Recorder, 2023