Government to Procure 7.7 million tons of Domestic Wheat

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Posted on: 23 Apr 2012

Wheat being purchased by the Government of Pakistan will be purchased at the higher new procurement rate of Rs 1,050 per 40 Kg ($292/ton).

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT POLICY Voluntary Public - Date: 4/13/2012 GAIN Report Number: Pakistan Post: Islamabad Government of Pakistan to Procure 7.7 million tons of Domestic Wheat Report Categories: Grain and Feed Approved By: Richard Todd Drennan Prepared By: Asmat Raza Report Highlights: The Government of Pakistan, on April 6, decided to procure 7.725 million tons of wheat from farmers at a cost of Rs210 billion ($2.3 billion) through loan guarantees to provinces. The wheat will be purchased at the higher new procurement rate of Rs 1,050 per 40 Kg ($292/ton). General Information: The Government of Pakistan, on April 6, decided to procure 7.725 million tons of wheat from farmers at a cost of Rs210 billion ($2.3 billion) through loan guarantees to provinces. The wheat will be purchased at the higher new procurement rate of Rs 1,050 per 40 Kg ($292/ton). The decision was taken in a meeting of the Economic Coordination Committee (ECC), headed by the Finance Minister of Pakistan. The federal government will provide guarantees for raising Rs210 billion ($2.3 billion) to help the provincial governments and Pakistan Agricultural Storage and Services Corporation (PASSCO) to procure 7.725 million tons of wheat. The interest rate for Rs210 billion in new lending would be decided later after negotiations with the banking industry. ECC also fixed the share of each province/agency, and allocation amounts needed by them, as outlined in table 1. Table 1: Distribution by province/agency and allocation amount for wheat procurement Province Quantity in ?000? tons Pak Rupees in billion U.S. Dollars in million Punjab 4,000 105 1,167 Sindh 1,300 34 378 Khyber Pakhtunkhwa 325 8.5 94 Baluchistan 100 2.6 29 PASSCO 2,000 59 656 Total 7,725 209.1 2,324 As of March 31, the federal government and provinces owed Rs179.6 billion ($2 billion) to banks from previous wheat procurement loans. The new lending will increase the debt to Rs398 billion ($4.42 billion). The government decision to buy 7.725 million tons of wheat, one of the highest ever government wheat procurement, is perceived as a political decision to appease the rural electorate during an election year. The actual quantity of wheat procured, will still be determined by several factors such as the actual size of the wheat crop and government?s ability to secure finances. The Government of Pakistan?s decision to procure 7.725 million tons of wheat will not affect post?s PSD estimates, reported earlier.
Posted: 23 April 2012

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