With production of wheat slated to fall short of targets by a million tons, speculation is rife in the market about an imminent food shortage. During the last few weeks, the same speculation has led to considerable panic in the market and significant hoarding is underway, already driving up prices of the staple commodity.
And in the middle of the chaos has come news that the country is set to export up to 100,000 tons to Iran in lieu of a barter trade to pay off energy dues- further stoking the fire.
"Taking into account post-harvest losses, the countrys food, feed and seed stock requirements have climbed up and demand should hover somewhere close to 26 million tons," says Dr Ibrahim Mughal, Chairman Pak Agri Forum who says that the governments decision to barter wheat for energy belies all sense of responsibility to the local food security agenda.
The government had previously set a target of 25 million tons, which has now been scaled down because of the loss in area harvested and rains close to harvest time which have increased the moisture content of the winter crop.
Food security analysts forecast the per capita consumption of wheat at around 120 kilograms per person per annum, which means that the country needs at least 24 million tons of wheat to cover food requirements alone this year. Even by a conservative analysis, the reported shortfall in production means that consumers might have to pay up to Rs50 per kilogram for flour in coming months.
But food department officials are adamant that food security in the country is not under threat. Talking to BR Research, Director Punjab Food Department Capt (r) Muhammad Usman said it was private hoarders who have been creating unnecessary panic and that food departments were right on track with their procurement plans and would be covered by the time the drive ended.
"We issued 72 tons of bardana (gunny bags) on Sunday alone, and if we make a comparison year-on-year, our procurement up till the end of last week was 2.4 million tons, up from 1 .6 million ton during the same period last year," he said.
If and when the aforementioned shipment to Iran goes out, the wheat will be sourced through Passcos stocks, which currently has over one million tons in reserve.
Col Tanveer Hussain, the official spokesman for the food authority told BR Research that the first consignment will be a government to government transaction of 30,000 tons, which will be followed by dispatches made by private entities nominated by the Pak-Iran governments.
He added that while yields were indeed lower this season, the plans to barter had been in the works for some time now and that Passco was fully covered to make full on its commitments, insisting that national food security was in no way under threat.
Keeping realistic expectations in view, it seems that the dispatches to Iran might just end up a long drawn out process, and the most significant threat to the nations food security will remain the private hoarders this season.
Market sources have also indicated that even growers themselves have been saving some of their crop, as there is a lot of misinformation in the market regarding the yield.
The people who are waiting to strike gold when the government fails to make its target however, may be in for a surprise.
With things on track for a majority of the provincial departments and due to the limited holding capacity of hoarders, the market just might crash in the next 15-20 days, said one source, claiming that once the provincial procurement departments exit the market, those hoping to sell their stash will receive a rude awakening.