KARACHI: Pakistan spent some one billion dollars on the import of wheat during this fiscal year (FY24) to meet the domestic demand and avoid shortage of the commodity in the domestic market.
The federal government in July last year decided to import wheat as the domestic crop was insufficient to fulfill the domestic demand. On the recommendation of the Ministry of National Food Security and Research the Economic Coordination Committee (ECC) of the cabinet allowed the private sector to import wheat from the international market without involving any subsidy. The ECC of the Cabinet in July 2023 asked the State Bank of Pakistan (SBP) for opening of LC for wheat import.
According to statistics, the country produced some 27 million metric tons of wheat during 2023 as against the consumption of 31 million metric tons. As per government estimates after calculating the carry-forward stocks of 2022, there was a wheat shortage of about 2.5 million metric tons, while according to the market, the country was facing a shortage of about 3 million metric tons of wheat during the last year.
The crop shortfall forced the government to allow the wheat to fill the demand and supply gap and keep the commodity prices stable in the domestic market. The private sector-initiated wheat imports in August last year and first shipment arrived in September 2023.
According to official statistics, Pakistan imported wheat amounted to $ 1 billion during July-March of FY24 compared to $997 million in the same period of last fiscal year. In terms of quality, wheat import rose by 36 percent during the period under review. Cumulatively, the country imported wheat 3.4 million metric tons during the first nine months of this fiscal year as against 2.5 million metric tons in corresponding period of last fiscal year.
Muzzammil Chappal Chairman Cereal Association of Pakistan (CAP) told Business Recorder on Friday that the lower commodity prices in the world market not only keep the import bill about billion dollars but also provide an opportunity to the private sector to import wheat without government subsidy.
He appreciated the government’s decision of wheat import through the private sector without involving any subsidy and said that the cash strapped government has not spent a single penny on import of wheat and the private sector has successfully filled the supply and demand gap.
He said the timely import initiative by the government and private sector keep the wheat and wheat flour prices stable in the crucial months from December to March as compared to 40 percent increase in the corresponding period of last year.
Initially, the federal government allowed the import of wheat by private sector till the end of February 2024, however, due to some disturbance in the Red Sea and Black Sea there was some delay in the arrival of shipments, of which CAP asked for some extension in the import period.
As the voyage period from the Black Sea region was increased from 20 to 40 days due to some risks and harsh weather, on the demand of CAP the federal government extended the import period by one month and the private sector was allowed to complete import of wheat till March 31, 2024, Chappal informed.
The Chairman CAP said in a crucial period private importers have performed well and served the nation by importing wheat from their own resources aimed to stabilize the wheat and wheat flour prices.
He hoped that during this fiscal year Pakistan’s wheat crop is expected to be sufficient to meet the domestic demand. As per initial production estimates the country is likely to achieve some 28.5 million metric tons wheat with carry-forward stock of about 4 million metric tons.
Copyright Business Recorder, 2024