The looming wheat crisis

People across Pakistan, including Sindh, are currently facing a shortage of wheat and flour crisis. The tragic news is that, looking at the current scenario, there maybe a shortage of 1.9 million metric tons of wheat expected during the current financial year. To prevent this, it is necessary to control the storm of wheat hoarding, profiteering, and artificial inflation. It is important to acknowledged that out of the estimated shortage of 1.9 million metric tons of wheat, Punjab – the largest province in terms of Pakistan’s population – will suffer from 95 percent of it.

Every year in order to prevent a wheat crisis the government procures the said commodity during harvest season to be released in September/October to the millers on a scheduled price, thus ensuring the flour prices remain stable in the country. As of today, the target for procurement of wheat in Pakistan was an estimated 8 million tonnes out of which 6.5 has been achieved, leaving a shortage of approximately 1.5 million tonnes in the procurement.  In addition to this, another 0.4 to 0.5 million tonnes is stored by flour millers which, as per their statement, they have not yet procured. 

Due to artificial inflation and hoarding, wheat which should have cost Rs 36 per kg was being sold at Rs 45, while flour which should have cost Rs 40 per kg, was being sold at Rs 49 to 50 per kg. Rising prices have a devastating effect on poor households making it difficult for vulnerable segments of society to afford two square meals a day.

The carelessness, misappropriation, and profiteering are mind-boggling. Whenever the price of petroleum products rises, it contributes to a higher inflation level. Yet, nowadays, when the prices of petroleum products have been reduced, we haven’t seen its positive effect on wheat or flour. This is clearly evidence of the hoarding mafia’s strength and influence.

In Lahore the price of wheat these days is Rs. 1775 per maund, and in Ghotki Sindh, the same quantity of wheat costs Rs 1,500. This means, there is a difference of Rs 225 per maund in two cities of the same country. The same goes for flour. Life of the poor is becoming more miserable and painful; high inflation is adding insult to  injury.

On the other hand, it is ironic that farmers/middlemen have also hoarded large quantities of wheat. They have been able to do so due to the government banning the direct purchase of the said commodity. No private company can buy wheat directly from a farmer.

In order to overcome the wheat crisis, the government must start supplying wheat to millers from 15th June this year or 1st July at the very latest. Only 0.5 million metric tons of wheat is allowed to be imported. This quota should be increased to 2 million tons to avoid speculation and selective import policies favoring selective individuals and companies. Additionally, the withholding tax on wheat exports should be abolished so that the cost of the wheat is not increased; at the moment the CNF price of wheat from Blacksea is around 210 to 220 per metric ton which equates to roughly 37.5 rupees per kg. 

Importing wheat now will automatically push the stored crop into the open market and thus reduce prices as per the very basic principles of supply and demand. Additionally, wheat exported after mid-September once poured into the market, will also help overcome the flour and wheat crisis even further.

The Punjab Food Department seems to be active against the hoarders. An operation was carried out against the hoarders in Khanewal on May 31 in which 1,500 sacks of wheat were seized. Similar operations were also held in different cities of Punjab.

Both the provincial and federal government must look into the issue seriously on urgent basis. Man’s greatest need is the hunger for which he is willing to commit crimes. A transparent investigation should be conducted against the wheat hoarders and the people who create artificial inflation. And the people behind these crimes should be detained and punished.