Pakistan Observer

Proposal of levy duty on wheat exports rejected

Staff Reporter

Wednesday, January 16, 2013 - Islamabad—Federal government has rejected a proposal of Ministry of National Food Security and Research regarding imposition of regulatory duty on export of wheat to contain the current increase in flour prices across the country.

However, the government has approved release of one million tons of wheat from the stocks of Pakistan Agriculture Storage & Services Corporation Limited (Passco) immediately to the provinces and flour mills. “We have decided to give 0.1 million tons of wheat to each province and 5000 tons to each flour mill on first come first serve basis aimed at dealing with current price hike trend,” said Ahmad Bukhish Lehri, Secretary Ministry of National Food Security and Research.

The sources said the government would extend up to Rs 350 per ton as incidental charges for wheat. Total amount to be spent on this account would be about Rs 350 million. Official documents reveal that the Economic Coordination Committee (ECC) of the Cabinet was informed on January 10, 2013 that in the recent past unusual hike in the price of wheat and wheat flour has been witnessed.

The analysis shows that the following are factors contributing to this price increase: (i) announcement of increase in support price of wheat from Rs1,050 to Rs1,200 per 40 kg;(ii) increase in wheat sale price by the Punjab Government from the existing Rs1,075 to Rs1,125 per 40 kg and restrictions imposed by that government on release of wheat to flour mills; (iii) export to Afghanistan and other destinations; and (iv) hoarding and speculation.

The ECC was further informed that as on January 4, 2013 stocks of wheat in the country stood at 5.788 million tones, out of which 2.128 million tons were held by Passco.
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