“Is it not the wheat harvest today? I will call on the Lord to send thunder and rain, so that you will know and see what a great evil you have committed in the sight of the Lord by asking for a king.” The verse from Samuel 12:17, perfectly sums up the love-hate relationship between wheat and precipitation humanity has witnessed since ages.
A timely rain during sowing in early winter can be absolutely critical for this off-season crop; downpour in harvest season can be equally devastating. The deluge witnessed across Punjab during the past week has raised similar fears, as news of crop destruction has poured in, especially from southern regions of the province.
After all, the only major cereal crop of the Rabi season is also the biggest crop of the country by acreage, but that is more a function of lack of R&D in alternate crops suitable for off-season plantation. At 25.1 million tons output, Pakistan regularly features among top ten global producers. However, it is debatable whether the output is a function of demand or lack of opportunity.
Commodity trade in wheat is very heavily regulated, with PASSCO functioning as the primary buyer in the market. Annual government procurement is close to 6 million tons, which is further released to wheat millers for processing into flour.
Thus, it could be estimated that urban wheat demand is no more than one-fourth of annual production. Remainder stays in the rural economy for on farm consumption as food and feedstock. PASSCO’s opening stock at the beginning of marketing season this year already stand close to 4.5 million tons; thus, it stands to reason that government procurement this year would have remained on the lower side. Due to uncompetitive support price, exports are unable to make little dent in surplus stocks, with 8MFY19 exports at less than 0.6 million tons.
Given the surplus availability, what do the torrential rains mean for wheat and flour prices, especially given Ramazan season is right around the corner? On the positive side, wheat crop cultivation is not concentrated in any region of the province, as Bahawalpur division in the south, Faisalabad in central, and Sargodha to Gujranwala belt in north all featuring among districts with high area under cultivation.
Second, the worst affected crop by the rain appears to be concentrated in the south and south-west region. If the erratic downpour stops here, the crop loss will be restricted to southern Punjab, whose average production is close to 8 million tons per annum, or 25 percent of national output. Channel checks put annual national farm consumption in the country at an upper limit of 14 million tons, which means if the destruction is widespread, government may have to go into full crisis mode as PASSCO stocks will have to be rerouted as emergency stocks for farmers. While low international wheat prices will offer some respite if wheat stocks need to be imported to furnish urban demand, the pressure on flour prices will begin to show soon.
Is anyone except for divine forces is to blame? May be. In “Mediocrity, Inc”, published in this space on 2019, this section had noted that farmers delay sugarcane harvest because mills pay higher premium for cane when its water content dries, reducing overall weight but increasing sucrose content. This results in delay of wheat sowing. Could the destruction of wheat crop have been avoided? May be, but as they say, hindsight is always 20-20.
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