DesPardes + PKonweb

INSIGHT: Wheat Row Talking Points and Narratives

  1. The Punjab Food Department (PFD), as per official statistics, manages 75% of wheat production of Pakistan.
  2. Situation at the Punjab Food Department provided an opportunity to manipulators and hoarders of the commodity to play their games, says a report. Another report says wheat crisis originated in Sindh and then spread to other provinces. The prices of wheat, flour started escalating in different parts of the country from September/October last year, and have now sky rocketed. The problem was exacerbated by a decision to export 200,000 to 400,000 tons of wheat, keeping in view surplus stocks on the basis of estimates presented by Ministry of National Food Security and Research. However, according to a report, last year was the second successive year in which wheat production in the country was lower than the preceding year. It was anticipated that production was most likely to drop to a five-year low.
  3. The decision by Sindh and Khyber Pakhtunkhwa food departments not to procure wheat from farmers aggravated the situation.
  4. In the past ten months, wheat stocks rapidly reduced, standing currently at 4.2 million metric tons, which are not sufficient to meet more than two months’ countrywide needs. On a monthly average, wheat consumption in the country hovers around 2 millions tons.
  5. No one is sure that 4.2 million tons stocks actually exist amid concerns that a significant portion of these stocks, including in Sindh, have either informally been given to flour millers or have been stolen.
  6. A story appearing in The News in June last year stated that the Punjab Food Department had initiated an inquiry into alleged role of former director food and members of Pakistan Flour Mills Association in fake exports to Afghanistan.
  7. The story further claimed that that many flour mills owners were acting as grain traders and minted huge money at the expense of national exchequer.
  8. The subsidized wheat was never processed by many flour mills; rather it was sold at higher rates in the open market.
  9. An insider said matching the data of electricity consumption by the mills with the wheat quota indicated that mills were selling the wheat in the market. According to The News, corruption probes against officials in the Sindh government discouraged many in the province from the procurement of wheat.
  10. Meanwhile, wheat prices rose in local as well as Afghan markets.

The World Bank has estimated the subsidies for wheat operations at over Rs50 billion. Nearly 70% of the amount goes for repayment of loans and interest to the bank.

Based on Original Reports:
1. https://tribune.com.pk/story/2141904/2-mayhem-pfd-caused-pakistans-flour-crisis/
2. https://www.geo.tv/latest/268257-how-the-wheat-crisis-unfolded-across-pakistan
3. https://tribune.com.pk/story/1938674/2-pakistans-wheat-production-likely-hit-five-year-low/