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Disposal body to take stock of wheat situation:
Meeting on 24th
KARACHI, April 21: The
looming wheat crisis over Sindh will dominate the
proceedings of the wheat disposal committee
meeting in Islamabad on April 24. Senior food
officials are meeting in Islamabad to take stock
of the current wheat situation amidst reports that
the Punjab, the only wheat surplus province, has
unofficially restricted the wheat movement to
Sindh and Balochistan. But for some unexplainable
reasons, Punjab is allowing wheat to go to NWFP.
Since Punjab is not allowing wheat to Sindh and
Balochistan, the Karachi traders are focussing on
farmers of their province, which is keeping the
market hot and prices going up.
Prices of wheat are crawling up again in the open
market restricting Sindh government's capacity to
procure wheat from the farmers at the officially
fixed rate of Rs875 for 100 kilogramme.
PASSCO has also entered Sindh for procurement and
is offering Rs890 for 100 kilogramme to the
farmers. Market watchers predict prices of wheat
and flour going up again in Karachi and other
parts of the province during next few days.
Sindh Food Minister Arif Jatoi, a strong believer
in open market economy, had given a firm assurance
on the floor of provincial assembly on April 7
that wheat and flour prices would stabilise in
next two weeks. "The commodity brokers, traders
and millers have joined hands to prove minister is
wrong," a market analyst remarked in a bitter
tone.
"Free market demands a close monitoring of the
commodity, an effective regulatory framework and
above all honest and competent regulators," the
market analyst said who regret that "we have
none." "Consumers were never so vulnerable and
helpless as they are now," is another sarcastic
remark.
Amidst all this confusion, the traders, millers
and the commodity brokers are engaged in a head on
with the Food Department officials and want all
the official and unofficial restrictions on wheat
movement to go.
Officials, on the other hand, want an outright ban
on wheat movement. "Sindh is a wheat deficit
province which needs almost two million tons of
wheat in the current season to meet the demand,"
explained an official.
He said that it was necessary that the province
should have about 1.2 to 1.3 million tons of wheat
in the reserves and is therefore expected to
demand on Saturday in wheat disposal committee at
least 700,000 tons from the federal government.
There is a proposal to formalise wheat movement
restriction in the province through enforcement of
section 144.
Enquiries reveal that Sindh government has managed
to procure hardly 70,000 tons of wheat from the
farmers in the current season. This procurement is
better than that of last year when about 50,000
tons of wheat was procured in the corresponding
period.
But officials say that procurement in the current
season is distressing as the government fixed a
procurement target of 0.6 million tons which looks
unachievable. Trade circles reveal that banks have
advanced more than Rs1.5 billion for commodity
operations in last few weeks, which is also one of
the factors for keeping the wheat prices high.
The State Bank's recent quarterly report has said
that low interest rates on bank loans have led to
speculative wheat trading. The Sindh government is
reported to have asked the State Bank sometimes
back to suspend commodity operation loaning to
private sector at least during official
procurement operations. Traders say that even a
few of the bank officers in Sindh have taken loans
to trade wheat.
Another reason for creating uncertainty in wheat
trading is that the government has not come out
with an issue price so far. The government
increased procurement price to Rs350 for 40
kilogramme from Rs300 for same quantity.
But the issue price on which the government will
give wheat from its stocks to millers is awaited.
Brokers and traders are hoarding wheat in
anticipation of at least Rs60 to Rs80 increase in
issue price of wheat.
Speculative trading of wheat is going on in full
swing in the province although under Food Control
Act 1958 the food department has all the powers to
check on wheat stocks of growers, traders and
millers. The Sindh Food Department has no
capacity, resources, skill or will to monitor
wheat stocking with the traders and brokers.
Then there is a transport mafia. This mafia
thrives on wheat transportation from Punjab to
Sindh and has a vested interest in wheat shortages
and crisis in the province. The National Logistic
Cell arbitrarily increases the freight. This
government is committed to privatization of all
state-owned assets. But it has so far overlooked
NLC.
The DAWN
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Pakissan.com; Advisory Point
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