“Wheat yielding was recorded low, because of which markets are short of stock in Punjab, while the stocky purchased in bulk, now selling at Rs 32,000 per tons against the official fixed rates of Rs 30,000 per metric tons,” the sources added. The prices were unaffordable, therefore the province couldn’t purchase it, the official sources said.
For current season, the province had set a target of procurement 400,000 metric tons of wheat from Punjab, against the 300,000 metric tons procured in last year 2012-13 to meet requirements of that commodity and food grain in the province, while the Pakistan Agriculture Storage and Supplies Corporation (Passco) also allowed for purchasing the commodity from the market as per its requirements, said an official.
However, the sources said the province did not have the capacity to store 400,000 tons of wheat, but it had to go for it in line with an instruction by the federal government, said well-place sources said. The province has totally produced around one million tons of wheat annually. Its total annual wheat consumption requirement was 3.9 million tons, showing a shortage of 2.9 million tons for which it heavily relied on supplies of wheat flour from Punjab, sources added.
In addition to subsidising transportation charges, the government spent a substantial amount on account of mark up against loans it got from banks to procure wheat, they explained. According to the officials, the KP province has available surplus stock of 68,000 metric tons at different PRC, which can helpful to prevent any shortages of the commodity in the coming days. Currently, at three major storage centres, about 24,000 metric tons in D I Khan, 4,000 in Nowshera, and 2,000 metric tons in Peshawar, the officials informed.
The officials said the wheat procurement process would formally pick up after signing of an agreement with Pascco, which was likely very soon. For that purpose, they said the KP Directorate of Food had opened 18 centres in different parts of the province to purchase wheat.
Last year, the official price of wheat was fixed at Rs 1,125 per 40 kilogrammes against which the provincial government had extended subsidy, spending a total of Rs 2 billion last year. The officials said that about 374,000 tons wheat released during last season to flour mills via different storage centres in the province. They informed that mills requirement was about 290,000 metric tons, which was releasing quota of 3,000 on daily basis. It would be expected to start distribution process to flour mills between October and February next, and fixing of prices would be ascertained after formal approval of provincial department of Finance, officials said.
“Though the official price has not yet been determined for this year, it is likely to be fixed from Rs 1,200 per 40 kilogram to Rs 1,250 per 40 kilogramme,” said a knowledgeable official. KP has total requirement of wheat as 124-kg per around 4,189,922 metric tons (MTs), including 3,383,765MTs for settled areas, 613,957 estimated to Federally Administrative Tribal Areas, and 192,200MTs for Afghan Refugees, as per estimated by National Food Security and Research Cell (NFS&R), according to the official documents.
The officials conceded that consumers in the KP province would bear the brunt of the government’s inability by paying higher as compared to consumers in Punjab. Consumers in the KP are paying Rs 100-120 more for a 20 kg flour bag than those in Punjab. The provincial food department usually procures wheat from Punjab and Passco, which it issues to local flour mills and then it is supposed to be sold to people at subsidised rates.
It was worth mentioning here that Pakistan Tehrik-e-Insaf-led government has allocated Rs 2.5 billion for subsidy and procurement of wheat for the financial year 2013-2014, to ensure sufficient availability of wheat stock and meet requirement of the commodity in the province.