The Economic Coordination Committee (ECC) approved an import tender for wheat at the price of $383.50 per metric ton. This price translates to Rs.65 per kilogram which is the highest that Pakistan has ever paid.
The ECC also gave a go ahead to the scale-back of the Kamyab Pakistan program despite reservations from some of its key members due to the lack of substantial information in the summary presented.
The Finance ministry originally presented a plan of Rs 815 billion for two years, but ended up providing a Rs 228 billion programme for the remaining two years of the current government. The plan allocated Rs37 billion to loans which will be lent to just one million borrowers.
Towards the end of the ECC meeting, Ministry of Finance said, “The ECC accorded approval for the lowest bid received for award of fourth international wheat tender for the FY 2021-22 to import 120,000 MT of wheat,”.
According to a senior government official, Rs.65/kg was the lowest bid at the exchange rate. The previous tender was agreed upon at Rs 61/kg. He further explained that the import price of 40kg will be around Rs 2,600 – substantially higher than the release price approved by Prime Minister Imran Khan at Rs 1950 for the issuance of wheat to the country’s flour mills.
The government has reached a decision to import 4M metric tons of wheat in order to fulfil the demand as well as to build up strategic reserves. Currently, all four tenders remain under subscribed. The prices for the aforementioned tenders range between $244 and around $384 per metric ton.
Special Assistant to the Prime Minister on issues pertaining to national food security said on Wednesday that everyone will be provided wheat flour at the price of Rs 55/kg with the exception of people below poverty line. However, the government will need to provide large subsidies at Rs65 for wheat.
– but scrapped a sugar import tender due to the same reason
A Geneva based bidder offered $670 per metric ton price for sugar import before the ECC went ahead and approved the scrapping of 50,000 metric tons import tender for sugar. This was again the highest bidding price offered which could’ve cost Rs113 per kg. Previously, the government had signed a tender for 200,000 metric tons at the price of $637/metric ton or Rs 106/kg.
ECC went ahead and issued an order to have three new tenders for 50,000 metric tons each in order to promote competition and participation when prices get low in the international markets.
The Ministry of Industries said that in addition to the already sufficient 715,000 metric tons of sugar stocks, 200,000 metric tons of imported sugar are being sent to Pakistan in the near future.
In line with the federal government’s decision of importing 600,000 metric tons of sugar, 300,000 metric tons have already been approved for import.
The Finance ministry said that in order to maintain a good supply of sugar in the country, the ECC had directed the sugar mills to initiate crushing at the start of November as was done last year.
Kamyab Pakistan Programme
As for the Kamyab Pakistan Program (KPP) a summary providing updates on the program was presented to the ECC on Thursday by the finance division.
A senior official at the Finance ministry commented that the plan regarding KPP has been revised by the government and it has reduced the loan to just Rs 90 billion which will be disbursed to 301,500 borrowers within this year, followed by another Rs138 billion lent to around 738,000 borrowers in the upcoming year. The subsidies are of Rs5.6 billion and Rs31.4 billion in 2021 and 2022 respectively.
An official who was in attendance for the ECC meeting explained that the Finance ministry was unable to provide data regarding the targeted districts under the program which meant that the amount of subsidies, beneficiaries and loans were all tentative which will need to be confirmed soon.
Finance Minister Shaukat Tarin had promised to launch an ambitious program which aims to provide interest free and cheap loans to around 30 million citizens in three years which will be the largest program in the history of the country. But his plans were dampened by the officials in finance ministry and the International Monetary Fund (IMF).
According to a finance ministry handout, the “program has been streamlined in consultation with stakeholders to disburse microcredit for uplifting marginalized segments of the society.”
The first three clauses talk about micro-loans which will be disbursed amongst people who fulfil the criteria of being registered with Ehsaas Data via National Socio-Economic Registry (NSER) and who have family income
Under the first three components, micro-loans shall be disbursed amongst eligible persons registered with Ehsaas Data through National Socio-Economic Registry (NSER) who have family income of up till Rs50,000 per month.