ISLAMABAD:
The government on Wednesday approved the sale of 500,000 metric tonnes of wheat in the open market at subsidized prices, including nearly 300,000 metric tonnes of imported wheat, which may cause a loss of Rs 2,355 per 40-kilogram bag to the exchequer.
Apart from open market sale through public bidding, the government decided to sell another 300,000 metric tonnes of wheat to the Punjab government at Rs 592 per 40 kg below its cost.
The cabinet’s Economic Coordination Committee (ECC) made the decision to sell wheat at a loss, highlighting poor economic and trade planning by the federal government. Expensive wheat was previously imported and now it will be sold well below the cost of purchase and storage.
The 294,994 metric tonnes of imported wheat, brought in 2022, are currently stored in the warehouses of the Pakistan Agricultural Storage and Services Corporation (PASSCO), which is in the process of being liquidated by the federal government.
The ECC approved the sale of 500,000 metric tons of PASSCO’s wheat stocks through open bidding, citing objectives such as managing surplus stocks, reducing storage costs, stabilizing domestic wheat prices and safeguarding food security, according to a press release from the Ministry of Finance.
The Finance Division had proposed to fix the reserve price equal to PASSCO’s cost of Rs 4,742 per 40 kg for local wheat and Rs 6,425 per 40 kg for imported wheat. However, the ECC approved the reserve price of Rs 4,400 for local wheat and Rs 4,070 for imported wheat.
PASSCO has two million metric tonnes of wheat stocks available for disposal and last month the federal cabinet decided to close the entity.
The ECC was informed that based on these prices, the estimated financial loss on the sale of 500,000 metric tonnes of wheat ranges between Rs 20,500 and Rs 22,000 million. However, the annual maintenance cost of the proposed amount is estimated to be more than Rs 11 billion.
Farmers had suffered immense losses due to the abrupt decisions of the federal and Punjab governments to stop purchasing wheat from farmers two years ago. Prices fell to Rs 2,500 per 40 kg and the situation worsened further due to wheat import. Now, the Finance Ministry would provide a subsidy of about Rs 20 billion to dispose of wheat stocks, including Rs 9 billion to be paid immediately.
The ECC was informed that PASSCO has 294,994 metric tonnes of stocks of imported wheat as of 2022, which are progressively losing their market value compared to new arrivals, a trend that will further intensify if stocks are held for a longer period.
The Food Ministry further said that the continued withholding of imported wheat was leading to increased transportation costs, and that any delay in disposal would likely put downward pressure on market prices during the upcoming Rabi harvest season.
The Ministry of National Food Security and Research has also become a den of experiments and mismanagement, as the government has transferred one food secretariat after another.
The ECC also approved the supply of 300,000 metric tonnes of PASSCO wheat to the Punjab government to maintain adequate supply of wheat for flour mills, stabilize prices and ensure uninterrupted availability of wheat flour to consumers, the Finance Ministry said.
The Punjab government had requested the federal government to provide 300,000 metric tonnes of wheat from PASSCO stock on an urgent basis at Rs 3,900 per 40 kg. However, the cost of wheat, including additional charges for PASSCO’s local wheat, is estimated at PKR 4,742 per 40 kg.
The matter was referred to Deputy Chief Minister Ishaq Dar, who authorized the sale of wheat at Rs 4,150 per 40 kg. The ECC on Wednesday sealed the Deputy Prime Minister’s decision. The federal government will bear a loss of Rs 4,400 crore on sale of 300,000 metric tonnes of wheat to Punjab.
Supervisory Committee
All provinces as well as relevant federal institutions reported sufficient wheat stocks to meet the country’s current needs, along with encouraging trends in crop sowing for the 2025-26 Rabi season, according to an official statement on Wednesday.
Food Security Minister Rana Tanveer Hussain chaired the fourth meeting of the National Wheat Monitoring Committee, which reviewed the overall wheat situation, focusing on stocks, inter-provincial cooperation, procurement planning for 2026 and market stability.
The meeting was attended by representatives of all provinces and relevant federal institutions. The committee reviewed the wheat supply situation and expressed satisfaction that sufficient reserves are available to meet requirements during the current year.
Those gathered were informed that there has been no shortage of wheat across the country and that adequate measures have been taken to ensure uninterrupted availability of the commodity until the next harvest.
Wheat procurement strategies were also discussed at the provincial level, with an emphasis on protecting farmers from exploitation. The provinces said effective monitoring and implementation measures have been taken at the district level to ensure fair returns to farmers.
While reviewing the role of the private sector, the meeting was informed that there are operational regulatory mechanisms to safeguard the interests of farmers. Inter-provincial coordination was highlighted as essential to maintain market efficiency and balance throughout the country.
Regarding the planting season, the meeting observed encouraging trends that reflect farmer confidence and better agricultural practices. Concluding the meeting, the minister reaffirmed the government’s commitment to food security, stable markets and the maintenance of adequate strategic reserves.
