ISLAMABAD:
The government on Wednesday approved the sale of 500,000 metric tons of wheat in the open market at subsidized rates, including nearly 300,000 metric tons of imported wheat, which may cause a loss of Rs2,355 per 40-kilogram bag to the exchequer.
In addition to the open market sale through competitive bidding, the government decided to sell another 300,000 metric tons of wheat to the Punjab government at Rs592 per 40 kg below its cost.
The Economic Coordination Committee (ECC) of the cabinet took the decision to sell the wheat at a loss, highlighting the federal government’s poor economic and commercial planning. Expensive wheat was imported earlier, and it will now be sold well below the cost of purchase and storage.
The 294,994 metric tons of imported wheat, brought in 2022, are currently stored in the godowns of the Pakistan Agriculture Storage and Services Corporation (PASSCO), which is in the process of being wound up by the federal government.
The ECC approved the disposal of 500,000 metric tons of PASSCO wheat stock through competitive bidding, citing objectives such as managing surplus stocks, reducing storage costs, stabilizing domestic wheat prices, and safeguarding food security, according to a press statement from the Finance Ministry.
The Finance Division had proposed fixing the reserve price equal to PASSCO cost of Rs4,742 per 40 kg for local wheat and Rs6,425 per 40 kg for imported wheat. However, the ECC approved the reserve price of Rs4,400 for the local wheat and Rs4,070 for the imported wheat.
PASSCO has two million metric tons of wheat stocks available for disposal and the federal cabinet last month decided to close the entity.
The ECC was informed that the based on these prices, the estimated financial loss for the disposal of 500,000 metric tons of wheat ranges from Rs20.5 billion to Rs22 billion. However, the annual carrying cost of the proposed quantity is estimated at over Rs.11 billion.
The farmers had sustained immense losses due to the federal and Punjab governments’ abrupt decisions to stop buying the wheat from the farmers two years ago. The prices fell as low as Rs2,500 per 40 kg and the situation further worsened due to import of wheat. Now, the Finance Ministry would give approximately Rs20 billion subsidy to dispose of the wheat stocks, including Rs9 billion that will be immediately paid.
The ECC was informed that PASSCO has been holding 294,994 metric tons of imported wheat stock since 2022, which is progressively losing its market value compared to fresh arrivals, a trend that will further intensify if the stock is retained for a longer period.
The food ministry further said that the continued retention of the imported wheat was resulting in escalating carrying costs, and any delay in disposal is likely to exert downward pressure on market prices during the forthcoming harvesting Rabi season.
The Ministry of National Food Security and Research has also become a den of experiments and mismanagement as the government has transferred one after another secretary food.
The ECC also approved the provision of 300,000 metric tons of PASSCO wheat to the government of Punjab for maintaining adequate wheat supplies for flour mills, stabilizing prices and ensuring uninterrupted availability of wheat flour to consumers, said the Ministry of Finance.
The government of Punjab had requested to the federal government to provide 300,000 metric tons of wheat from PASSCO’s stocks on urgent basis at Rs3900 per 40 kg rate. However, the cost of wheat including incidental charges for local wheat of PASSCO is calculated at PKR 4,742 per 40 kg.
The matter was referred to the Deputy Prime Minister Ishaq Dar who authorized to sell the wheat at Rs4,150 per 40 kg rate. The ECC on Wednesday stamped the decision of the Deputy Prime Minister. The federal government will bear Rs4.4 billion loss on the 300,000 metric tons of wheat sale to Punjab.
Oversight Committee
All the 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 Rabi season 2025-26, according to an official statement on Wednesday.
Food Security Minister Rana Tanveer Hussain chaired the fourth meeting of the National Wheat Oversight Committee, which reviewed the overall wheat situation, with a focus on reserves, 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 position and expressed satisfaction that sufficient reserves are available to meet requirements during the current year.
The meeting was informed that there has been no shortage of wheat across the country and that adequate arrangements are in place to ensure uninterrupted availability of the staple commodity until the next harvest.
Wheat procurement strategies at the provincial level were also discussed, with emphasis on protecting farmers from exploitation. The provinces said that effective monitoring and implementation measures have been taken at the district level to ensure fair returns for farmers.
While reviewing the role of the private sector, the meeting was informed that regulatory mechanisms are operational to safeguard farmers’ interests. Inter-provincial coordination was highlighted as essential for maintaining efficiency and market balance nationwide.
Regarding the sowing season, the meeting noted encouraging trends reflecting farmer confidence and improved agricultural practices. Concluding the meeting, the minister reaffirmed government’s commitment to food security, stable markets and maintaining adequate strategic reserves.
