WHEAT CRISIS IN PAKISTAN

INTRODUCTION
In Pakistan, wheat being the staple diet is the most
important crop and cultivated on the largest acreages in
almost every part of the country. It contributes 14.4 percent
to the value added in agriculture and 3.0 percent to GDP.
Pakistan is the world's sixth largest producer of wheat,
according to the Ministry of Food and Agriculture, and is a
nation of more than 160 million people who consume 25
million tones of wheat every year.

WHEAT SETUP IN PAKISTAN

Area and production:
yield
Year
1980-81
1990-91

Pakistan wheat production and

Production

yield

11475
14565

1643
1841
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WHEAT CRISIS IN PAKISTAN

2000-01
2002-03

19024
19183

2325
2388

Wheat growing regions in Pakistan

Wheat is grown all over Pakistan. Province wise Punjab
dominates both in area and production.
Province wise percentage of area and production of wheat in
Pakistan, 2002 03

Province

Percentage of Percentage
total
area wheat
under wheat
produced

PUNJAB

76

79

SINDH
N.W.F.P
BALOCHISTAN
PAKISTAN

11
9
4
100

11
6
4
100

of

Pakistan has been divided into ten production zones because

of great agro ecological areas where wheat is grown. The
zoning is mainly based on cropping pattern, disease

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WHEAT CRISIS IN PAKISTAN

prevalence and climatologically factors. However, production

zones need to be revisited.

cultivation
Percen Percen Seaso
tage
tage
n
croppe food
d area grain
acreag
e
37

67

Wheat conditions for

Soil

RabiAlluvial
required loamy
mild
soil
tempera
tures
and low
rainfall

Sowin Harves
g
ting
period period

October- AprilNovemb May

er

RESEARCH AND DEVELOPMENT INSTITUTIONS ON

AGRICULTURAL:
The need for Research and Development (R&D) institutions
on agricultural mechanization was established relatively late
in Pakistan. Currently, a Farm Machinery Institute (FMI) at
Islamabad under Pakistan Agricultural Research Council
(PARC) at Federal level, Agricultural Mechanization Research
Institute (AMRI) at Multan under the Government of Punjab
and Agricultural Mechanization Research Cell (AMRC) at
Tandojam under the Government of Sindh are solely engaged
in farm machinery research and development work.
Furthermore, Centre for Agricultural Machinery Industries
under the Government of Punjab is also engaged in farm
mechanization promotion activities.

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WHEAT CRISIS IN PAKISTAN

Wheat crisis in Pakistan

Wheat is a major crop that is produced in the country, but

unfortunately, there is wheat shortage, that it is not
available in the market, if available is on higher prices.
The Pakistan Government increased the minimum price for
procurement of wheat by almost 38 percent in 2008.
ISSUE OF WHEAT SHORTAGE IN
PAST:
Wheat shortages in Pakistan have taken place four times.
Causes of the shortage have been the same that is
smuggling to neighboring countries. But none of those
shortages were as acute as now.
First in 1953, of Khawaja Nazimuddins Prime Minister
Ship, the food shortage hit the country; we borrowed $ 10
million from the World Bank and purchased wheat from
Canada on loan. The total cost of wheat imported from
Canada was $ 35 million.
Second in 1967 wheat shortage took place during Ayub
Khan days, when we purchased wheat worth Rs 110
million (in those days, one corer Rupees used to be equal
to $ two million, whereas now one million dollar is equal to
Pak Rupees three million.
Third time it hit Pakistan in Zia ul Haq days. Smuggling out
of our wheat to India, Afghanistan, Iran and Central Asia
was the cause of second wheat shortage.

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WHEAT CRISIS IN PAKISTAN

Fourth time it hit Pakistan during Pervez Musharaf days.

Wheat was smuggling out and too much hoarding of
wheat.

SELF SUFFIENCY IN WHEAT

Although the wheat growing areas have been steadily
increasing over the years, Pakistan is still not sufficient in
wheat production. Pakistan has to import wheat in 43 of the
53 years between 1947 2000. Since 1988 89, Pakistan has
not been able to meet its requirements. Infact in 1999 2000,
2 million tones of wheat had to be imported. Unfortunately,
wheat production cannot keep pace with the food needs of
the growing population.

Why their is insufficiency of wheat?

Pakistan has improved its productivity level of wheat from
1950-07; the productivity level is recorded as 3.9-23.7 i.e. 6
times increases in production in wheat crop. But the issue of
wheat shortage is still going in the country wheat is still un
sufficient and if available in on higher price. There are black
sheep in every field which disturb the market equilibrium.
The main reasons are; Smuggling - of our wheat to neighboring countries
India, Afghanistan, Iran and Central Asia was the cause
of second wheat shortage.
(It is said that there is no single mill in Afghanistan
which grinds wheat into flour,
and it is smuggled there
in the form of flour.)
UG99- The rust UG99 from Uganda spread into Kenya
and Ethiopia then crossed into Yemen and has recently
been reported in Iran. This proximity presence and its
wind borne spore spreading nature threatens Pakistan
wheat areas particularly Sindh and lower Punjab where
stem rust is to be a problem. Now it is said that they have
control over the some extent ad 2008 crop will not
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WHEAT CRISIS IN PAKISTAN

affected by UG99.

Pakistan had a bumper crop last year but instead of

holding some of the wheat in storage; it exported
much of the excess.

Black marketing/Hoarding- Due to the shortage of

wheat. Farmers dont sale wheat, and wait till the demand
gets high because of low supply in a region, which
ultimately increases the prices.
The question to ask, when we face such shortages is why
Pakistan cannot device a wheat / agriculture policy to
become a wheat basket in the region. We have all the
elements for it.
Pakistan has one of the largest alluvial lands in the world, all
of which can be used for cultivation if this possibility is given
serious thought.

MEASURES TAKEN BY
GOVERNMENT (2008)

PAKISTAN

PRESENT

Subsidy: By watching the current situation of

shortage of wheat, Pakistan government forced flour
mills to sell flour on reasonable old rates but they
refused because they already suffering from loss.
So the governments imported wheat on high prices
from United States and other countries. The imported
wheat is given to the flour mills and subsidized it
(giving relief to flour mill owners to sell flour on
reasonable rate),
Benazir agriculture card scheme - Minister for
Food and Agriculture Nazar Muhammad Gondal has
expressed the hope that Benazir Agricultural Card
Scheme will help farmers to increase agricultural
production. The scheme had been introduced to
facilitate small farmers, while the card would be valid
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WHEAT CRISIS IN PAKISTAN

for three years.

Interest rate on the credit will be as per the rate
applicable on production loans.There will be no limit
on the number of transactions through the card and
require no more than one interface of the farmer with
bank officials
President Asif Ali Zardari has also directed the
Ministry to import reconditioned tractors for
farmers on cheaper rates.
Federal Minister for Food and Agriculture Nazar
Muhammad Gondal along with Minister for Industry
Mian Manzoor Ahmed Wattoo also announced the
decision of fixing Rs 660 per bag of urea as
compared to the market price of Rs 950 per 50 kg bag
to break the cartels and end black marketing of urea.

GLOBALLY AFFECTED CONDITION OF

WHEAT
The rich will suffer and poor may die, where and why
America- according to ABC NEWS cost of pastries is now very
high. 15 pond bag of flour which was previously of $15 now it
is $40.
Not only America sansalvido, chille and Germany, Egypt,
Africa are also suffering from wheat crisis.
Chille bread is most popular in chille.they are the fifth
highest consuming nation of flour. Increase in price affects
the whole country, the price of kilo bread rise by 10 cent and
also the bakery goods.
El-Salvador according to HECHOS television on FEB 21,
2008 bakery prices increased tremendously. The shopkeeper
of one bakery said two years back 21 dollars for 100 pound
of flour, now they pay 45.
According to BBC NEWS on 13 Sep 2007, even the noodles
lover are also suffering

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WHEAT CRISIS IN PAKISTAN

According to KBS NEWA South Korean people consume 3.6

million wheat per yr now the increase in price is also a major
problem for them.
In Egypt potencial highly prices are politically problem,
according to south ASIA NEWS LINE and ALJAZEERA NEWS
on 27 June 07 , breed is major part of Egyptian diet, bread is
a matter of national security because 20% people live below
poverty line and they relay on bread.
In Africa high prices means starvation. According to BBC
NEWS on 18 October 2007 starvation is going on, about
8050 million people are given aid by UN and many other
countries. Corn and wheat both are expensive here.
CONCLUSION
Wheat shortage is not only the problem of Pakistan but many
other countries are also suffering from the wheat crisis.
In Pakistan the major reason of wheat shortage is smuggling
and black marketing,
The question to ask, when we face such shortages is why
Pakistan cannot device a wheat / agriculture policy to
become a wheat basket in the region. We have all the
elements for it. That is Pakistan has one of the largest
alluvial lands in the world, all of which can be used for
cultivation if this possibility is given serious thought.

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WHEAT CRISIS IN PAKISTAN

NEWS UPDATES ABOUT WHEAT ISSUE:

Benazir agriculture card scheme to help raise
production: Gondal
ISLAMABAD (December 18 2008): Minister for Food and
Agriculture Nazar Muhammad Gondal has expressed the
hope that Benazir Agricultural Card Scheme (BACS) will help
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WHEAT CRISIS IN PAKISTAN

farmers to increase agricultural production. Talking to PTV,

he said the scheme had been introduced to facilitate small
farmers, while the card would be valid for three years.
"Interest rate on the credit will be as per the rate applicable
on production loans. There will be no limit on the number of
transactions through the card and require no more than one
interface of the farmer with bank officials," he added.
The loan will be disbursed against every crop with a grace
period of 90 days. Gondal said 20,000 tractors would also be
provided to farmers on subsidised rates, adding that Rs
200,000 subsidy on purchase of a tractor would be provided
to the farmers.
President Asif Ali Zardari has also directed the Ministry to
import reconditioned tractors for farmers on cheaper rates.
To a question, he said an increase in the official support price
(Rs 950 per 40kg) had encouraged the farmers to sow wheat
on million of acres and the country would be able to achieve
the 25 million tons production target. He said Trading
Corporation of Pakistan and Pakistan Agricultural Storage
and Services Corporation had been directed to purchase rice
from the farmers.
Courtesy Associated Press of Pakistan
Black-marketing may hit wheat yield

By DAWN news
MULTAN, Dec 17: Wheat growers in southern Punjab are
finding the going hard as they claim that urea fertiliser has
disappeared from the market.
According to them, these are the crucial days for utilisation
of urea.
The shortage owing to manipulation of market forces is
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WHEAT CRISIS IN PAKISTAN

leading to the hike in fertiliser prices. Its black-marketing

was at its peak when the wheat sowing gained momentum in
southern Punjab.
A number of farmers fear less wheat yield this year owing to
high urea price, besides shortage of water and low cotton
rates.
The government had set the control rate of urea at Rs650
per bag, but dealers were allegedly fleecing the growers.
Agriculture experts and farmers attributed this shortage and
hike in prices of fertilizer to lack of governance.
Abdul Rasheed, a farmer from Shujaabad, complained that
the urea black-marketing was increasing and it was being
sold at high prices against its controlled rate.
He said small growers were victims of acute shortage of
urea.
A farmer from Rahim Yar Khan, Muhammad Sharif Dhareja,
said farming had become nearly impossible in the face of the
rising prices of various fertilizers, seeds and pesticides.
He said urea was hardly available for Rs850 per 50kg bag,
which was beyond the purchasing power of poor farmers.
Hazoor Bakhsh, a progressive farmer from Kot Sultan,
Layyah, said wheat sowing was at its peak but neither seed
nor urea was available in the market, as profiteers had
stocked the commodities for black-marketing.
Kisan Board central secretary-general Jam Hazoor Bakhsh
said dealers were keeping fertilizer at unidentified places in
villages to avoid their sale at controlled rate.
EDO (agriculture) Zaffaryab Haidar Naqvi confirmed the
shortage and black-marketing of fertilizer. He said besides
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WHEAT CRISIS IN PAKISTAN

activating field assistant staff, he himself was conducting

raids on shops and distributing fertilizer among farmers at
controlled prices.

RECENT ARTICLES ON WHEAT ISSUE:

Wheat production target hard to achieve, experts
believe
(By Nauman Tasleem)
LAHORE (December 19 2008): The wheat-sowing target
might be achieved this year but the wheat production target
would not be achieved due to delay in wheat sowing and
other factors, the farmers associations and agriculturists
informed on Thursday.
However, the MINFAL official's claim is to the contrary as
MINFAL believes that the wheat production target would be
met.
They said that the government has set target of sowing 22
million acre land while the wheat production target is set at
25 million tones. However, till end of
November
only 50 percent area could be brought under cultivation.
"With further delay the yield of wheat would be affected and
as a result, the production of wheat would drop," said Dr
Mohammad Tariq Bucha, Director and Honorary Chief Coordinator Farmer Association Pakistan (FAP). He said that the

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WHEAT CRISIS IN PAKISTAN

sowing of wheat in a number of districts is quite positive but

delay in sowing would affect the production. He said that
wheat sowing has been delayed in cotton and sugarcane
areas. "Ideally, wheat should be sown till 20 November, as in
this case the wheat yield comes very good," said Bucha.
"Unfortunately till that date only 28 percent area could be
brought under cultivation," he lamented. "With each passing
day, the yield reduces by 16 Kg per acre per day thus wheat
lost per acre in one month would be around 480 Kg," he
estimated. Bucha said that the target of 25 million tones
wheat production is very optimistic approach by the
government officials. "I wish we achieve the target but my
calculation tells that even 20 million tones would be a hard
task to achieve," he said.
The average yield in Pakistan is around 25 maund per acre.
Agri Forum Chairman, Ibrahim Mughal said that the wheatsowing target has been achieved by around 80 percent but
forecasting about production is difficult. "There are multiple
factors, which could affect crop including weather in the
coming months and availability of water," he said.
Qadir Baksh Baloch, Ministry of Food and Livestock
Development Commissioner for Crops said that 95 percent
sowing area has been achieved and the government is very
optimistic to achieve the wheat production target. "The
wheat sowing starts on 20 October and ends on 10 January
therefore the wheat area would be achieved," he said. He
believed that current rains would also help in better yield.
It is pertinent to mention that last year Qadir Buksh Baloch
while talking to Daily Times has said that the wheat area and
production would be achieved.
According to Economic Survey of Pakistan, the government
for 2007-08 has set the target of sowing 21.1 million acre
and production at 24 million tones but only 20.8 million acre
were sowed and wheat production could not cross 22 million
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WHEAT CRISIS IN PAKISTAN

tones.
Courtesy Daily Times

US sanctions $48 million to import wheat on

deferred payment
(By Zafar Bhutta/Asma Razak)
ISLAMABAD (December 19 2008): United States of America
(USA) on Thursday sanctioned 48 million dollars to provide
200,000-250,000 tons of wheat to Pakistan on deferred
payment. Trading Corporation of Pakistan (TCP) will float
tender on Friday to import the said wheat from the USA on
deferred payment at the rate prevailing in American market.
Addressing a joint press conference, Federal Minister for
Food and Agriculture Nazar Muhammad Gondal along with
Minister for Industry Mian Manzoor Ahmed Wattoo also
announced the decision of fixing Rs 660 per bag of urea to
break the cartels and end black marketing of urea. Gondal
said that USA had sanctioned 48 million dollars to provide
200,000-250,000 tons wheat to Pakistan on the deferred
payment under GSM scheme.
He said that TCP would float tender on Friday to import the
wheat from USA. He said that government had fixed the urea
price at Rs 660 per bag after a meeting with fertilizer
manufacturers here on Thursday. He said that government
would offload 290,000 tons urea fertilizer in the market by
December 31 to break the cartel of the market players.
Private sector will offload 100,000 tons urea fertilizer in the
local market to maintain balance between supply and
demand.
During the meeting with manufacturers, government has
decided to purchase 50 percent urea from the manufacturers
during the coming months. He said that total production of
fertilizer manufacturers would be 0.7 million tons urea and
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WHEAT CRISIS IN PAKISTAN

government would purchase 450,000 tons from them in the

coming months. Government would procure 100,000 tons
urea from fertilizer manufacturers in the current month
whereas 350,000 tons urea would be purchased during
January-February 2009. Government would get the urea from
the fertilizer manufacturers at Rs 660 per bag whereas the
imported wheat price is Rs 650 per bag. The minister said
that government would charge Rs 10 per bag additionally on
the imported wheat to land at Gwadar.
He said that government would import 390,000 tons urea by
January 15 and 190,000 tons urea would reach Pakistan by
December 31 to distribute among the farmers. The minister
noted that government would float another tender of
350,000 tons urea import on January 15 to ensure the
availability for farmers. He warned the black marketers that
they will be dealt high-handedly if involved in creating
shortage. He said that provincial governments had been
directed to lodge FIR against the black marketers.
Manzoor Wattoo said that government was taking different
measures to make Pakistan self-sufficient in the wheat. He
said that government had spent Rs 64 billion on the wheat
import, which could save Pakistan to go to IMF.
He said that government had allocated Rs 32 billion subsidy
for the fertiliser during the current year and had given Rs 27
billion subsidy to the fertiliser manufacturers and importers
of DAP after capping the price at Rs 3,050 per bag.
Wattoo said that it was decided that government would take
action against the dealers who would force the farmers to
buy DAP for urea bag. He said that industry department and
National Fertilizer Company (NFC) would purchase 50
percent urea production from the fertilizer manufacturers as
per decision taken here in the meeting.
He said that local urea production would be seven million
tons and government would receive 450,000 tons from them
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WHEAT CRISIS IN PAKISTAN

to meet the farmers' requirements. He said that dealers were

providing urea at Rs 850 to Rs 950 per bag due to black
marketing and now government would provide urea bag at
Rs 660. He said that a committee headed by federal minister
for industry would determine fertilizer prices in future.
Courtesy Business Recorder

New wheat crisis plagues world food supply

Posted Mar 27 2008, 03:46 AM by Jon Markman
Filed
under: investing,
economy, Jon Markman

Anheuser-Busch,

McDonald's,

If it seems like you are paying more for your cereal, beer and
pizza lately, shake your fist in the direction of Pakistan,
Uganda and Argentina, because a weird confluence of
international events are combining to slash the world supply
of wheat and boost prices. The downside of globalization is
that a crop failure 10,000 miles away can lead to pricier
brewskis here.
It's actually a lot more serious than that. The New Scientist
magazine reports that a wheat disease that started in central
Africa actually threatens to destroy most of the world wheat
crop, leaving millions to starve. A fungus called Ug99 has
already spread from Africa to Iran and is bearing down on
Pakistan, according to the report. This is bad news because
Pakistan and Punjab wheat is extremely important to the
entire food chain of the densely populous plains of South
Asia.
According to reports, scientists hope to slow the spread of
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WHEAT CRISIS IN PAKISTAN

Ug99 by spraying new forms of fungicide but the only real

firebreak will come when agronomists are able to create
Ug99-resistant strains of wheat over the next few years. The
disease, which is said to be a super-strong strain of black
stem rust, first came to light in Uganda in 1999 and has
since ruined crops in Kenya, Ethiopia and Yemen. Now winds
are expected to take the spores to Egypt, Turkey, Syria and
Iran. Chinese scientists are said to be on a crash program to
develop Ug99-resistant wheat strains before the disease
ravages its already weakened croplands.
Meanwhile, down in Argentina, a three-week protest by
farmers has curtailed shipments of wheat into supermarkets,
pushing that country into its worst political crisis since 2002.
News media report that thousands of farmers are
withholding meat and grains from wholesalers and blocking
country roads to oppose a hike in export taxes. Argentinas
president, Cristina Kirchner, has accused farmers of
extortion, while protesters fill streets, banging pots and
pans.
Food shortages in Buenos Aires are worsening, and the
media reports that shops have run out of beef and chicken,
while fruits and vegetables are soaring in price. The
government is said to be digging in its heels on the tax
increases that it believes are necessary to support social
programs such as fuel and health care subsidies, while
farmers say they are being unfairly targeted. The upshot is
that the turmoil has also curtailed exports, putting strains on
world wheat prices.

Pakistan launches crash program for wheat

crop in quake-hit areas
Posted by Kashif Aziz
December 18, 2005
Pakistan has launched a crash program for wheat crop in a
43,000-acre land in the earthquake-devastated areas of
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WHEAT CRISIS IN PAKISTAN

North West Frontier Province and Pakistan-administered

Kashmir.
Agriculture Minister Sikandar Hayat Khan told the Lower
House of Parliament on Thursday that under this program,
seed and fertilizer have been provided free of cost to farmers
with the collaboration of the United Nations aid agency.
In response to a question by an opposition lawmaker Samia
Raheel Qazi, he said a total of 28,000 acres of farming land
in NWFP and 15,000 acres in Kashmir were devastated by
the quake.
The killer quake struck Pakistans NWFP and Kashmir on Oct
8, killing over 73,000 and injuring more than 100 thousand
people, in addition to destroying standing crops and
cultivable land.
The minister added that the government was now working
on a plan to ensure provision of seed and fertilizer to farmers
in the affected areas for the next crops, starting from March.

Flour millers propose setting-up wheat board

By Nauman Tasleem
December 18, 2008 Thursday
LAHORE :In a letter to the Prime Minister, flour millers have
proposed establishing a wheat board for dealing any possible
flour crisis in the future, industry sources informed Daily
Times on Monday. The millers said that they have proposed
establishing the said board to take stakeholders of the
commodity into account. They said that farmers, flourmills,
government and consumers are the major stakeholders of
the commodity and they should be counselled before taking
any decision. They said this would also help the government
in getting actual production of wheat rather depending upon
fictitious figures. Millers said that the bureaucracy has in the
past often taken such decisions that have ultimately created
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WHEAT CRISIS IN PAKISTAN

wheat and flour crisis in the country. They said that through
wrong figures, some mischievous elements misguided the
government to provoke it for exporting wheat and this thing
severed the flour crisis. The ongoing problem started when
the government exported one million tonnes of wheat, said
a flour miller adding that even Pakistan Flour Mills
Association tried its best to stop the government from wheat
export but the bureaucracy turned a deaf ear to their
requests. He said that wheat export remained on cheaper
rates and this thing played havoc. The supplies of wheat in
international market is less and now the rates have sky
rocketed, he said adding that a multitude of wrong
decisions wrong figures, export and now import all these
factors showed that all the things were deliberate and some
hidden forces forced the government to make faults. He said
that flourmills owner said that if the bureaucracy has
listened to the PFMA then such a situation would never have
occurred. Reportedly, political figures, both on the treasury
and the opposition benches, have been involved in the
ongoing wheat and flour crisis. Federal and provincial
governments have held each other responsible for the crisis.
Punjab Chief Minister Pervaiz Elahi and Federal Minister
Jehangir Khan Tareen blamed each other for not taking
appropriate steps on right time, said a flourmill owner adding
that the wheat board would help in sorting such issues. The
current wheat crisis has left people in a fix, who were bound
to buy wheat at very high prices. Chairman Zonal Committee
of FPCCI on Flourmills Industry and former chairman of
Pakistan Flourmills Association, Punjab, Bilal Aslam Soofi said
that the millers, in a letter to the prime minister, have
requested him to form Pakistan Wheat Board on an
emergency basis.

Karachi without flour supplies for three days

By Irfan Naqvi
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WHEAT CRISIS IN PAKISTAN

Friday, May 16, 2008

KARACHI: Flourmills have not supplied bags of flour to
retailers for the last four days, causing an artificial flour crisis
in Karachi, and according to retailers, the middlemen have
informed them that supply will be resumed shortly but prices
will shoot up to Rs300 per 10-kilogramme bag.
Former Pakistan Flourmills Association Sindh circle Chairman
Muhammad Yousaf told Daily Times that wheat is available in
large amounts in interior Sindh but the government has not
allowed its transportation to Hyderabad. I have the capacity
to crush 1,800 bags of wheat everyday, but on Wednesday I
hardly managed to produce 450 bags while no trading took
place on Thursday, he said.
The government has directed flourmills not to purchase
wheat at rates above Rs 1,800 per 100 kg in an effort to
maintain flour prices. At the same time, the ex-mill price
(price at which flour is bought from the flourmills) was fixed
at Rs 220 per 10-kg bag at a meeting held last Monday.
The ceiling fixed on the purchase price of wheat has
curtailed all procurement of wheat for the last four days,
since flourmills cannot purchase wheat at rates above Rs
1,800 and rates in the open market are well above that. It
goes without saying that ending wheat transactions will lead
to a flour shortage in the city, said Yousaf, adding that the
Punjab flourmills have announced they will go on strike from
May 17 but flourmills still deem it necessary to keep crushing
wheat to flour so that the city be saved from turmoil. It is
now up to the government to decide what to do next.
In Karachi, wheat is not available and flourmill owners have
not procured a single kilogram of wheat from the open
market. So far, they have been purchasing wheat from
interior Sindh, but there was no trading on Thursday. There
are around 73 flourmills in city and only a few have about
two days stock of wheat left, he added.
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WHEAT CRISIS IN PAKISTAN

All Pakistan Flour Mills Association Sindh circle Mirpurkhas

region Vice-Chairman Waleed Malik told Daily Times that the
government should extend the limit of wheat procurement to
600,000 metric tons and allow flourmills to buy the required
wheat directly to overcome the flour crisis and avoid price
hikes in future.
The power crisis, increases in fuel prices and the restriction
on flourmills from buying wheat at above Rs 1,800 are the
main reasons for the current crisis, said Malik, adding that
the government has fixed a daily upper limit of 600 bags of
wheat purchased from the open market. Theses 600 bags of
wheat make 60 tons of flour. The need of flour in city is at
least 4, 000 tons of flour daily.
Sources in the open market and the flour business told Daily
Times that the trend of wheat and flour transportation and
procurement seems to be creating the flour crisis anew. The
government has not allowed flourmills to buy wheat at above
Rs 1,800, wheat stayed above Rs 2,000 in the open market
on Wednesday.
All Karachi Atta Chakki Operators Association General
Secretary Muhammad Anis Shahid said that private chakki
operators have closed their stones for the last three days
due to non-availability of wheat from the open market. There
are over 2,800 private chakki operators in Karachi, of which
around 1,250 are routinely operational. The chakki flour
rates prior to the closure of stones had been raised from Rs
250 to Rs 280 and Rs 290 per 10-kg bag due to a dearth of
wheat.
by ahsan ali mangi
for tbl
Pakistan is the world's sixth largest producer of wheat,
according to the Ministry of Food and Agriculture, with an
annual production of over 21 million metric tonnes (MT). The
US Department of Agriculture estimates Pakistan's rice
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WHEAT CRISIS IN PAKISTAN

consumption to be over 2.5 million MT. With exports of about

the same quantity, Pakistan is capable of feeding its own
population. Faced with such positive facts, we all wonder
about the exact reasons for the prevailing wheat crises,
which has existed in varied degrees for over a year now.
The Pakistan Government Wheat Policy
Before delving into the crisis, it is important to present an
overview of the prevailing Government wheat policy (also
known as Food Security policy).
The Government is obliged under the constitution of the
Islamic Republic of Pakistan for the provision of essential
food at affordable prices to the population throughout the
country (please hold back that snicker and eye-roll).
To fulfill this responsibility, provincial governments have
setup food departments for the purchase and storing of
wheat stocks at government silos, which are then released to
flourmills so as to keep wheat and wheat flour available at an
affordable price throughout the year.
Procurement and storage of wheat by the Government is
necessitated due to the peculiar nature of agriculture
produce: wheat is harvested once a year during April-May.
Thus, there is a glut of wheat inherent within the system. In
the commodity markets every cultivator is anxious to sell his
produce and clear liabilities (such as fertilizers, seeds) and
take any well-deserved profit back home.
However, arrival of the crop creates disequilibrium in the
market benefiting the purchaser who tries to bring the prices
down. The notorious middlemen enter here. Thus the
government also enters the market with an announced
minimum price and ready to buy all the wheat being offered.
This sets a floor price for wheat in the time of plenty and
curtails possible exploitation of the farmer, thus influencing
cultivator's decision to grow wheat again, since it is
profitable. Wheat storage is a costly business in terms of the

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opportunity cost of investment, storage, fumigation and

transportation charges.
Thus, as months pass, overheads on wheat stocks result in
an increase in prices and the private sector brings its wheat
in the market based on their comparative holding power.
Moreover, the government also sets its own release price for
wheat, which only partially offsets overhead costs on
storage. This price serves as the ceiling price in the wheat
market and private traders clear off their stocks before this
limit is reached. This policy is in operation with relative
success for the last 25 years except for the times when the
wheat crop in Pakistan has failed.
Why the Crises?
Why has there been a crisis in the supply of wheat and a
spike in prices since last July, when in fact Pakistan produced
wheat comparable to its requirements and imported 1.8
millions MT of wheat during December 2007?
Different quarters have given different alibis including
misrepresentation of crop size by Government to boost GDP
growth figures and concurrent permission to export wheat
(700,000 MT was exported in May-June 2007) which later
adversely affected market sentiments causing panic buying
by public and hoarding by traders.
Another version blames the Government for failure in
assessing changes in the local and international situation;
increased wheat requirements as poultry feed (due to corn
crop failure) rising to 1500,000 MT as per estimates of
experts.
Another postulates that people are switching to wheat as
rice prices sky rocketed due to extensive export of the
commodity.
A fourth proposed reason is the increase in international
wheat prices peaking at an unprecedented $550/MT,
according to the Chicago Board of Trade.
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Unrealistic agriculture-related public policy also came under

criticism. An increase in the cost of production, due to the
doubling of fertilizer costs and increased petroleum prices,
also played a role in disrupting the tested Government wheat
policy as purchase prices set by the government did not
cover the cost of production, thus incentivising the growers
to: either retain their crops or try selling them at higher
prices to private traders if possible.
World Wheat Whereabouts
while all the above arguments hold; we are still at a loss to
explain fully the current happenings in the local wheat
sector.
The world wheat situation has improved this year. World net
wheat production is estimated to be 8 percent higher this
year than last year. Estimated in 2008 by the U.S.
Department of Agriculture, at a record 656 million MT for
2008-09 against total consumption of 642 million MT world
wheat stocks grew from 110 million MT to 124 million. MT.
There has been record production in Canada, EU, U.S. and
Russia. Australian produce is estimated to double (from 12 to
24 million MT) after consecutive crop failures in the last two
years. India, with 76 million MT of home-grown wheat, has
made it clear that it will not import wheat this year.
Apart from Pakistan, which has announced its intention to
import 2.5 million MT of wheat during 2008-2009, there is no
non-traditional buyer in international markets for wheat to
pump wheat prices up.
All factors point at easing of international wheat prices in the
coming months. Thus, the present wheat situation in
Pakistan is not due to the global wheat scene as is oftattributed by seemingly guilty quarters.
Current Wheat Situation in Pakistan
The Pakistan Government increased the minimum price for
procurement of wheat by almost 38 percent in 2008. The

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aim was to offset price escalations in agricultural inputs and

increase returns for the growers.
This is the single largest increase the Government has
initiated in the minimum procurement price of wheat in the
past twenty five years.
Despite reservations shown by several growers'
organizations, experts are of the opinion that increase in the
procurement has benefited the growers by increasing the
returns on their produce.
However, in light of the prevailing situation, private traders
are buying wheat at rates much higher than those set by the
government. Flourmills are finding it difficult to buy wheat
from open markets immediately after harvesting season.
Field evidence suggests that bigger growers are also
retaining (read: hoarding) their produce in the criminal hope
of better prices in the future. The situation is an aberration
to normal market dynamics and it is evidence that the
government's efforts and its policy on wheat are not
effective. The world wheat situation has negligible bearing, if
any.
This change, where open market wheat prices do not
correspond to the arrival of new harvests, has been
witnessed since 2007.
The government picks up 30 percent of the country's total
marketable wheat (that is, 50 percent of total crop as per
APCOMS estimate). For 2008-2009 this comes to Rs. 102
billion at a fixed purchase price of Rs. 15,630 per MT. Until
May 20, 2008, total credit received by private traders from
the banking system for wheat purchases in only Rs. 210
million.
Food Departments of two provinces (Sindh and Punjab)
complain of hoarding of wheat by big farmers and traders
who, according to them, until a few years back, could not
retain big quantities of wheat even for a couple of months.
This shift in the market situation points to the fact that new
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or non-traditional players have entered wheat market with

huge funds at their disposal which they can park for a much
longer time, for larger gains. While it is quite difficult to
estimate actual amounts belonging to local investors which
have left Pakistan bourses since February 2008, it is a
substantive amount (KSE 100 has lost more than 3000 points
since mid- April). With no substantive increases in the call
and time accounts of our banking sector, it is quite plausible
that this money has found better avenues and high returns
in commodities sector (of which wheat is the biggest).
Wheat, with its highly inelastic demand makes it a very
suitable target for highest gains in the shortest time period,
especially when the structural constraint of the wheat crop
size, which is just enough to fulfill the national demands,
lacks any cushion to ward off speculative trading in wheat.
The bottomline: regulatory bodies must shape up and step
up. Commodity trading has a very real, direct human
element and questionable business practices must be
curbed to avoid myopic monetary gains at the cost of massscale manipulation and suffering of who it all boils down to:
real people.

UG99 not present in Pakistan, bumper wheat

crop expected
By Ijaz Kakakhel
25 March 2008
ISLAMABAD: Current wheat crop (2008 harvest) will not be
attacked by UG99, as the race is not in our terrain.
Experimental tests of the local stem rust strain found in
Sindh is not UG99 as this local race has not attacked a wheat
test variety unequivocally susceptible to UG99 in field and
controlled environmental testing conditions.
Stem rust on wheat has caused international concern due to
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its occurrence, damage potential, systematic spread across

wheat growing areas in several countries coupled with the
threat it poses to Pakistan and countries beyond our borders.
The rust UG99 from Uganda spread into Kenya and Ethiopia,
then crossed into Yemen and has recently been reported in
Iran. This proximity presence and its wind borne spore
spreading nature threatens Pakistan wheat areas particularly
Sindh and lower Punjab where stem rust is to be a problem.
The situation is more acute as Pakistani wheat germplasm
tested in Kenya over the past few years did not give
encouraging signs that our varieties possess adequate
resistance levels to combat the race posing the threat.
Currently we are more prone to be affected with this danger
at our footsteps than 2005. Thus volatile efforts are needed
to be in place to address the perplexing situation.
However, gauging the swift move of the pathogen into
Yemen and now into Iran compels Pakistani researchers to
enhance efforts to protect national wheat productivity over
the next crop cycle (2008-09). The Pakistan Agriculture
Research Council (PARC) / NARC and national wheat
programmes are pursuing the task diligently across three
scenarios. The first is via introduction, adaptation and
release of high yielding germplasm selected from the elite
bread-screening nursery provided to Pakistan by CIMMYT,
Mexico.
These have resistance to UG99 based upon testing by
CIMMYT scientists and their colleagues in Africa hot spots.
The second tier of lines are those that are present in the
International stem rust screening nursery which are excellent
candidates to be used in any national wheat programme that
targets on recombination breeding around efficient breeding
strategies for swift outputs.
The third route is to exploit the identified genes for
resistance reported by CIMMYT and collaborators aided by
marked / linked genes via efficient breeding technology. The
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additional latent phase is a programme that can harness

unique resistance diversity of wheat relative species through
international testing in UG99 hot spots and then exploiting
this diversity in national recombination programmes.
Pakistani researchers are actively engulfed in integrated
activities to combat the pathogen. The know how is perfectly
in place and the task ahead chalked out with the facets of
scientific cooperation, financial assistance and political will
all operating in tandem.

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