By Staff Reporter
ISLAMABAD: The Economic Coordination Committee of the cabinet approved the sale of 500,000 metric tons of wheat held by the Pakistan Agricultural Storage and Services Corp. through competitive bidding at revised reserve prices after an earlier attempt failed due to lower bids, the Finance Division said.
The meeting, chaired by Finance Minister Senator Muhammad Aurangzeb at the Finance Division on Tuesday, reviewed a proposal from the Ministry of National Food Security and Research for disposal of surplus stocks. The committee was informed that the previous effort to offload the wheat at previously approved reserve prices could not be finalized because bids received were too low.
In view of the prevailing stock position and rising carrying costs, the ECC allowed the sale of the 500,000 metric tons on a first-in, first-out basis. Under the revised pricing, the reserve price was set at Rs4,150 per 40 kilograms for locally procured wheat and Rs3,800 per 40 kilograms for imported wheat.
The decision comes as authorities work to reduce mounting inventories at PASSCO and the associated storage and financing expenses amid fiscal consolidation under the country’s $7 billion International Monetary Fund stabilization program. Wheat pricing remains politically sensitive in Pakistan, where flour is a staple commodity and closely linked to inflation. Managing excess procurement stocks has become a balancing act for policymakers attempting to control food inflation while limiting subsidy pressures and budget deficits.
Pakistan is one of the world’s largest wheat producers and consumers, and government procurement and pricing decisions often ripple through domestic markets, affecting food inflation, rural incomes and fiscal spending. The country’s wheat policy has been closely scrutinized in recent years after bumper crops, fluctuating import decisions and subsidy adjustments created volatility in local markets.
For international investors and multilateral lenders, inventory management and subsidy rationalization are seen as critical elements of Pakistan’s broader economic reform agenda. Large public stockpiles carry financing and storage costs that add to fiscal pressure, particularly at a time when Islamabad is seeking to narrow budget deficits and stabilize its external accounts. Pakistan has also faced periodic wheat supply disruptions in recent years, prompting emergency imports that strained foreign exchange reserves. The current decision signals an effort to clear accumulated stocks while recalibrating price expectations in the domestic market.
Separately, the ECC also approved a technical supplementary grant of Rs536 million for projects under Pakistan’s Public Sector Development Programme. The allocation relates to schemes previously overseen by the now-defunct Pakistan Public Works Department, whose functions were recently transferred to provincial authorities as part of administrative restructuring and fiscal rationalization measures. The funds will be transferred to the governments of Punjab and Khyber Pakhtunkhwa in accordance with relevant legal provisions.
The committee also considered a summary from the Petroleum Division on a fact-finding report regarding a deed of settlement with Cnergyico PK Ltd., one of Pakistan’s largest oil refining and marketing companies, concerning delayed payments of the petroleum levy. The report was submitted in compliance with earlier ECC directions. However, the panel returned the summary with directions for a more comprehensive presentation at a subsequent meeting.
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