One of our principal commodities that 80 percent of our farmers grow on around 40 percent of the cultivated land remains in the doldrums. Of course, we are talking about the staple diet, wheat, which has reached an enormous surplus yet rots away because of failure to export (or store).

For the first couple months of FY17, Pakistan's wheat exports were just 230,000 MT - an improvement from zero in the same period last year, but nowhere near enough. Earlier this month, the FPCCI called out the TCP and TDAP over their inability to get the surplus wheat out of the country, which according to All Pakistan Flour Mills Association, is around three million tonnes.

Butt told BR Research that of the nine million tonnes of wheat currently in the country, around 6.5 million will be consumed. The remainder needs to be exported. To get that surplus out and compete with the international market, the export subsidy was raised recently, from $90 per tonne to $120 per tonne (Read "Wheat: increasing the subsidy," published August 02, 2016). However, the results thus far have been underwhelming. The subsidy is applicable on 0.9 million tonnes of wheat until the end of November 2016. So far, the target looks like it wont be met any time soon.

The RD on wheat imports has also been increased by an additional 20 percent to bring it up to 60 percent now. Official figures indicate that wheat imports have been nil throughout FY16 as well as for the first two months of FY17, so the previous 40 percent duty was working. However, as wheat prices are finding new lows, it was feared that the 40 percent RD would soon become ineffective and so, preemptively, the government has raised the RD to further protect the industry.

In the absence of proper storage facilities, this excess wheat is likely to go bad. Indeed, one of the points the FPCCI made last week was that the current stock of wheat had been infected with "dust and other ingredients." So, Pakistan needs to find some markets, and fast.