Advisor on Information and Broadcasting Dr. Firduous Ashiq Awan, while addressing a press conference, said that Prime Minister Imran Khan has issued directives to provincial government to take strong administrative measures against hoarders and profiteers to mitigate the adverse effect of rising inflation on people of low and middle income groups. The advisor blamed the wheat shortages on smuggling of this commodity to Afghanistan and said that the custom officers invoked in it have been suspended against whom Federal Investigation Agency will conduct probe.
Smuggling to Afghanistan alone cannot create acute wheat flour shortages in a country which has been producing surplus of this commodity for exports. It was the exports of wheat by cartels and steep fall in wheat production because of high input cost which resulted in shortages of wheat flour. The wheat cartel owners were getting export subsidy from taxpayers’ money. The wheat production from the currently standing crop will not be sufficient enough to meet the domestic demand. It explains the rationale behind the wheat import of 300,000 tonnes of wheat. Regulatory duty on its import would be reduced by 30 percent but even the price of imported wheat may be higher beyond the purchasing power of people. The transportation cost from Karachi to other cities of the country will abnormally jack up the price of imported wheat. Precedents about the import of poor quality wheat can be traced in the past. In mid-1990s wheat imported into the country was not of the quality to be consumed by human beings.
Sugar Mills Association on the one hand refused to buy sugarcane from farmers on the support price fixed by the government and on the other hand they managed to export 1.1 million tonnes of sugar for which they availed Rs.8 per kilogram export subsidy from the federal government. The sugar cartels, with strong connection in corridors of power in the present government as well, have pushed its price up to Rs.90 per kilogram. In other words they took double advantage by doubly hitting hard the people, getting export subsidy and jacking up price of sugar by Rs.25 per kilogram.
The government intends to import sugar in order to avoid the imminent shortages of this commodity. The import duty of 40 percent shall be waived off to ensure its availability at relatively lower price in the retail market. But if the well-entrenched sugar cartel members are allowed to import sugar then its price may not come down.
The leaders of regional parties are giving a parochial political dimension to wheat flour shortages with their usual propaganda tool of Punjab government bashing. Central General Secretary of Awami National Party Mian Iftikhar Hussain has threatened to stop flow of river water to Punjab if wheat flour supply is disrupted to Khyber Pukhtunkhwa. But the leadership of the party opposes tooth and nail the construction of Kalabagh dam and, while in government from 2008 to 2013, they even failed to complete the construction of ongoing small dams’ projects and Gomalzam dam to boost agriculture production in the province.
The report release by the Pakistan Bureau of Statistics (PBS) says that rate of inflation has gone up to 14.6 in January, which is the highest in 12 years. The report negates the assessment of Governor State Bank during announcement of monetary policy few days ago, predicting that inflation rate will remain stable between 11-12 percent till the end of current fiscal year and will fall down to the range of 5-7 percent in the next fiscal year. The data released by PBS shows unprecedented increase in the prices of food commodities such as wheat, sugar, pulses, poultry, dry skimmed milk, vegetables and fruits. Price control measures through administrative actions produce the desired results only when the productive capacity of the economy is not shrinking and supply is augmented by imports while ensuring perfect completion in the market. In case of Pakistan even liberal import of food commodities will not bring down prices if cartels are not reined in.
