Observer Report
Islamabad
Former Chairman FPCCI’s Standing Committee on Agriculture, Ahmad Jawad has said that six million tons of wheat had vanished from the market since harvest due to non transparency in the procurement process.
In a statement on Tuesday, he said with the only exception of New Zealand where wheat yield is nine tonnes per hectare, for most other major wheat-producing countries the yield remains in the range of three to six tonnes per hectare. In India, the yield is four tonnes per hectare and in China six tonnes.
Jawad further stated that Pakistan’s wheat yield is close to three tonnes. If it does not rise gradually to six tonnes in 10 years, our food security can be compromised. But this doubling of the yield is not possible if the country fails to formulate a national grow-more-wheat programme now and implement it meticulously year after year. But that requires full harmony between the federal and provincial authorities and clear demarcation of the lines of ownership of the programme.
He also briefed that global wheat production and consumption estimates for the 2020-21 season were updated by the United States Department of Agriculture last week, and the changes were broadly in line with market expectations.
The biggest mover on the import side of the global equation was Pakistan after production from their recently completed harvest fell short of expectations. The USDA increased imports from 100,000 tonnes to 1 million tonnes (Mt), but further increases are expected if recent reports out of Pakistan prove correct.
However, the government estimates final wheat production ended up at 25.5Mt, slightly above the five-year average of 25.38Mt. While that represented a 1.2Mt increase on the 24.3Mt harvested in 2019, it was well short of the government’s target of 27Mt.
At the end of June, cabinet approved the import of 2.5Mt of wheat. However, shipments did not immediately materialise as the private sector shied away; the selling price fixed by the government was lower than the cost of the imported wheat.
To bridge the gap, the Ministry of Food Security has abolished the duty on wheat imports for the private sector, stating that the 60pc regulatory duty and 11pc customs duty will not be levied. Additionally, the 17pc general sales tax and a 6pc withholding tax will not be collected, and the imported wheat has also been exempted from the Anti-Hoarding Act imposed by the provincial governments.
By the end of July, orders had already been placed by private merchants to import 300,000t of wheat, which will reportedly be shipped out of the Black Sea region over the August and September period. Purchases in the first two weeks of August total 120,000t, the latest being 60,000t booked late last week at US$227/t cost & freight for September shipment, again out of Black Sea ports; he added.
