The Pakistan Economy Watch (PEW) on Sunday said the country is heading towards a severe wheat crisis while the government will face losses of billion due to policy problems.
Wheat stocks with the different government departments have crossed to an alarming level of five million tonnes due to failure in exports despite repeated efforts which included jacking up export subsidy many times, said Dr Murtaza Mughal, President PEW.
He said that wheat support price doubled by the last government to win elections has provided considerable incentive for wheat growers which has resulted in heavy losses to the government. It has also resulted in lack of interest of growers in some other crops which has resulted in shortage of these crops and further build-up in wheat stocks, he added. Dr Murtaza Mughal said that the area under cultivation of wheat has reached a record high level and production continues to climb while there is no way to tackle surpluses. The federal and provincial governments had announced a combined subsidy of $90 per ton for exports of 1.2 million tons of wheat which failed as the prices in the international market were almost half of the price of Pakistan.
This year the wheat prices in the international market have gone down which will put additional burden on the government, he said.
Global stocks are already at record level which will grow further due to better crop making it difficult for the government to dispose of the growing stocks. The situation will emerge in favour of the middlemen who will put wheat at reduced rates as sowing in some parts of the country has already started, he warned.
Source: Business Recorder
Byline: Recorder Report
November 28, 2016