Islamabad, August 18, 2023 – The cost of wheat flour, a staple food for the masses in Pakistan, has experienced an unprecedented surge of over 132%.
(more…)Tag: Wheat
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Prime Minister directs strict action against smugglers of wheat, sugar and urea
On Tuesday, Prime Minister Shehbaz Sharif instructed the authorities to take strict action against smugglers of wheat, sugar, and urea, which negatively impacts Pakistan’s foreign remittances and deprives its people of their rights.
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Karachi on brink of major wheat flour crisis as supplies run low
Karachi, the financial and commercial hub of Pakistan, is likely to face massive shortage of wheat flour shortage as mills have stopped grinding.
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Pakistan purchases 450,000 metric tons wheat from Russia
ISLAMABAD: Pakistan is purchasing of 450,000 metric tons wheat from Russia as country’s economic coordination committee approved a bid of a Russian company.
The Economic Coordination Committee (ECC) of the Cabinet met on Monday which was presided over by Finance Minister Ishaq Dar.
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Federal Minister for Power Khurram Dastgir Khan, Federal Minister for Industries and Production Syed Murtaza Mahmud, Shahid Khaqan Abbasi MNA/Ex-PM, Minister of State for Finance and Revenue Dr. Ayesha Ghous Pasha, SAPM on Finance Tariq Bajwa, SAPM on Revenue Tariq Mehmood Pasha, SAPM on Government Effectiveness Dr. Muhammad Jehanzeb Khan, Federal Secretaries and other senior officers attended the meeting in person while Federal Minister for Commerce Syed Naveed Qamar, Minister of State for Petroleum Musadik Masood Malik, Coordinator to PM on Commerce and Industry Rana Ihsan Afzal and Governor SBP, MD PASSCO joined the meeting through Zoom.
READ MORE: Pakistan exports plunge 18.34pc in November 2021
Ministry of National Food Security and Research submitted a summary on Award of 7th International Wheat Tender 2022 opened on November 30, 2022.
Keeping in view results of 7th International tender and G2G offer, the ECC approved the lowest bid from M/s Cereal Crop Trading LLC at $ 372/MT for supply of 130,000 MT at Karachi ports for the shipment period from 16th December, 2022 8th February, 2023.
READ MORE: SBP foreign exchange reserves fall to $7.5 billion
The ECC also granted approval of the offer of M/s Prodintorg , Russia on Government to Government (G2G) basis at $ 372 /MT for supply of 450,000 MT at Gwadar Port for shipment period from 1st February, 2023 to 31st March, 2023.
It was decided that any additional cost on inland transportation from Gwadar Port will be borne by PASSCO to be recovered from provinces at the time of release of wheat stock.
READ MORE: Pakistan slaps 5pc regulatory duty on yarn import
The ECC also approved proposal of Finance Ministry to change the title of the revolving fund account for CPEC Independent Power Producers from “Pakistan Energy Revolving Fund” to “Pakistan Energy Revolving Account”.
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Pakistan donates 50,000MT wheat to Afghanistan
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Monday approved a donation of 50,000 metric tons of wheat to Afghanistan.
The Federal Minister for Economic Affairs Division (EAD) Omar Ayub Khan chaired the ECC meeting and took several important decisions.
Federal Minister for Energy Hammad Azhar, Abdul Razak Dawood Advisor to Prime Minister on Commerce, Textile, Industries & Production and Investment, Federal Secretaries and other senior officers participated in the meeting.
The ECC considered the summary submitted by the Ministry of National Food Security & Research approved the proposal for the donation of 50,000 M. Tons of wheat to Afghanistan. ECC further directed the Finance Division to provide funds for the purpose on an actual cost basis.
The ECC also recommended relaxation of the ban on the export of wheat/wheat flour to Afghanistan to the extent of the instant proposal with the direction that the Ministry of National Food Security and Research may inform the Federal Cabinet of the ratio for mixing of local and imported wheat in case export of wheat flour is required.
On a Summary tabled by the Ministry of Foreign Affairs regarding “Extraordinary Session of the OIC Council of Foreign Ministers (CFM) in Pakistan” the ECC approved two Technical Supplementary Grants (TSGs) for the purpose during CFY 2021-22 i.e., (i) Rs.233.342 million in favor of the Ministry of Foreign Affairs and (i) Rs 64.2 million in favor of the Interior Division.
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SBP revises instructions for financing wheat procurement
KARACHI: The State Bank of Pakistan (SBP) has issued notification to revise instructions regarding bank financing for wheat procurement by the private sector.
The SBP issued circular No. 02 of 2021 for amending the instructions issued on March 19, 2021 for financing wheat procurement by the private sector.
Following amendments have been notified by the SBP:
I. For private sector participation in the wheat procurement season 2021, banks are required to strictly fulfill the following minimum conditions for extending financing to eligible borrowers (licensed and functional flour mills duly evidenced by some documentation or licensed wheat traders registered with concerned authority/department);
a. Fresh financing for procurement of wheat shall start from commencement of wheat procurement season 2021 in respective provinces. Banks will provide financing to eligible borrowers for the procurement of indigenous wheat for the harvest season of 2021 (April 01-June 30, 2021). The financing facility would be extended to the eligible borrowers for procurement of indigenous and imported wheat from July 01, 2021 subject to other conditions mentioned in this circular.
b. Banks may provide financing facility to functional flour mills for purchase of indigenous wheat from their authorized representative and respective Food Department against supply of wheat by them. Quantum of such loan shall not be more than the value of wheat to be supplied by the respective Food Department or actual purchase from wheat traders, commensurate to the milling capacity of each mill. Banks will also monitor that existing stock of wheat purchased by the concerned functional flour mill, has been grinded and that the by-products of wheat (financed against bank loan) have also been released to the market gradually to repay the loans so obtained.
c. Banks will ensure that the subject financing will be used only for intended purposes. However, there is no restriction on banks for extending financing to flour mills for purpose other than procurement of wheat. Banks may provide financing to flour mills for general requirements like overhead expenses, however, banks will ensure that such financing is not used for procurement of wheat or to acquire wheat stocks/by-products of wheat.
d. Financing to private sector for procurement of wheat shall be provided against pledge of fresh wheat stock only and hypothecation / charge of moveable or immovable property would not be acceptable as collateral for such financing. Moreover, banks will ensure that no revaluation of the pledged stock is considered for release of any differential financing amount to the borrowers against stock of wheat already pledged with the banks.
e. Banks are also allowed to provide financing facilities for wheat procurement by the seed processing plants duly evidenced by the testing certificates issued by the Federal Seed Certification and Registration Department, in line with their lending policies and the capacity/production plans of the seed processing plants ensuring that such stock of wheat will be used for processing purposes.
f. These loans will be fully settled on or before 31st March 2022, positively.
g. In order to curb the possibility of hoarding, banks shall:
i. require client(s) to disclose their storage location and verify the same.
ii. strictly monitor the wheat stock held by the client vide periodical and random inspections of wheat pledged with the bank as well as the gradual release of wheat stock to generate cash for the purpose of repayment of bank loan. SBP may acquire stock reports from banks to verify their authenticity/genuineness as and when desired.
iii. be under obligation to immediately recall the advances allowed to the private sector in case of hoarding of wheat.
iv. ensure that no financing is allowed to client for retirement of loans availed from other banks.
v. ensure that their clients are in strict compliance with the guidelines of respective government (Federal/Provincial) for release of wheat stock and are not involved in any other activity which may cause speculation of wheat/flour price in market.
h. The lending shall be in compliance with applicable laws, Prudential Regulations and other instructions of SBP issued from time to time.
II. Banks will submit a monthly statement in respect of financing to private sector for wheat procurement to this department as per attached format (Annexure-A) within ten working days from the close of the relevant month.
III. Any violation of the above instructions will attract administrative and/or penal action under the provisions of BCO, 1962 and other relevant laws.
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SBP issues instructions to banks for wheat procurement by private sector
KARACHI: The State Bank of Pakistan (SBP) on Friday issued instructions to banks for procurement of wheat by private sector for the season 2021.
The SBP said that for private sector participation in the wheat procurement season 2021, banks are required to strictly fulfill the following minimum conditions for extending financing to eligible borrowers (licensed and functional flour mills duly evidenced by some documentation or licensed wheat traders registered with concerned authority/department).
Banks will provide financing to eligible borrowers only for the procurement of indigenous wheat for the harvest season of 2021.
Banks will ensure that the subject financing will be used only for intended purposes. Special efforts shall be made to ensure that the facilities availed for purposes other than wheat procurement are not utilized for financing of wheat stocks.
Fresh financing for procurement of wheat shall start from commencement of wheat procurement season 2021 in respective provinces. Financing against wheat and by-products of wheat viz. flour, meada, sujee etc. will be subject to minimum cash margin requirement of 10% of the value of the wheat stock & by -products. Banks shall not provide any financing facilities (funded or non- funded) to enable borrowers to meet the margin requirements.
Financing to private sector for procurement of wheat shall be provided against pledge of fresh wheat stock only and hypothecation / charge of moveable or immovable property would not be acceptable as collateral for such financing. Moreover, banks will ensure that no revaluation of the pledged stock is considered for release of any differential financing amount to the borrowers against stock of wheat already pledged with the banks.
Banks will not entertain any application for grant of fresh loans after 30th June, 2021 for procurement of wheat. However, banks may provide financing facility to functional flour mills for purchase of indigenous wheat from their authorized representative and respective Food Department against supply of wheat by them. Quantum of such loan shall not be more than the value of wheat to be supplied by the respective Food Department or actual purchase from wheat traders, commensurate to the milling capacity of each mill. Banks will also monitor that existing stock of wheat purchased by the concerned functional flour mill, has been grinded and that the by-products of wheat (financed against bank loan) have also been released to the market gradually to repay the loans so obtained.
Banks are also allowed to provide financing facilities for wheat procurement by the seed processing plants duly evidenced by the testing certificates issued by the Federal Seed Certification and Registration Department, in line with their lending policies and the capacity/production plans of the seed processing plants ensuring that such stock of wheat will be used for processing purposes
These loans will be fully settled on or before 31st January 2022, positively.
In order to curb the possibility of hoarding, banks shall:
— require client(s) to disclose their storage location and verify the same.
— strictly monitor the wheat stock held by the client vide periodical and random inspections of wheat pledged with the bank as well as the gradual release of wheat stock to generate cash for the purpose of repayment of bank loan. SBP may acquire stock reports from banks to verify their authenticity/genuineness as and when desired.
— be under obligation to immediately recall the advances allowed to the private sector in case of hoarding of wheat.
— ensure that no financing is allowed to client for retirement of loans availed from other banks.
— ensure that their clients are in strict compliance with the guidelines of respective government (Federal/Provincial) for release of wheat stock and are not involved in any other activity which may cause speculation of wheat/flour price in market.
The lending shall be in compliance with applicable laws, Prudential Regulations and other instructions of SBP issued from time to time.
Banks will submit a monthly statement in respect of financing to private sector for wheat procurement to this department within ten working days from the close of the relevant month.
Any violation of the above instructions will attract administrative and/or penal action under the provisions of BCO, 1962 and other relevant laws.
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ECC approves 0.2MMT wheat for Utility Stores
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Monday approved 0.2 million metric tons of wheat for Utility Stores Corporation (USC) to provide relief to masses.
Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the meeting of the Economic Coordination Committee (ECC) of the Cabinet today at the Cabinet Division.
ECC approved the allocation of additional 200,000 M.T of wheat for Utility Stores Corporation from PASSCO, the approved quantity will be released in tranches.
The first tranche will be of 50,000MT, which would be released immediately; the rest will be released on demand by USC.
The total cost of this package is Rs.8.690 billion including incidental charges of 1.690 billion. The chair also directed that the record of the USC and PASSCO may be completely computerized so that it may ensure transparency and facilitate decision making.
There was also a discussion in ECC on data collection from private flour mills in order to ascertain the correct situation of demand and supply of wheat/atta in the country and to ensure accuracy in decision making.
The Chair also asked the Poverty Alleviation Division to ensure transparency and efficiency in disbursement of funds to the vulnerable in wake of COVID-19 situation in the country.
Secretary Poverty Alleviation Social Safety Division assured the ECC that no one would be allowed to swindle the poor people of this country, he further informed that the multiple arrests have already been made and exemplary punishment will be given to those who will cheat the poor.
The Division also briefed the ECC that so far 1.7 million families have been paid under the Ehsaas program and payments to remaining families are underway.
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Committee constituted to probe wheat crisis
KARACHI: Prime Minister Imran Khan has constituted a high-level committee to probe wheat/flour crisis and fix responsibility.
Taking strict notice of the recent wheat/flour related controversy, Prime Minister Imran Khan has constituted a high-level committee to identify and fix responsibility, if any, on any individual/officer/organization, including any purported benefit to a private party, besides suggesting a way forward for future course of action, a statement said on Wednesday.
The committee comprises of Director General Federal Investigation Authority, as its convener, representative of Intelligence Bureau not below BS-20/21 and Director General Anti Corruption Punjab, as its members.
The Convener may co-opt any other member(s). According to directions issued by PM Office, the inquiry report shall, inter alia, include identification of causes; circumstances leading to the wheat/flour related controversy; assessment/projection of future stock leading to allowing export of wheat/wheat products and subsequent imposition of ban on exports; management of wheat stocks, within Federal Government and provinces, and coordination with provinces, and any other issue, deemed appropriate, related to the wheat/flour related controversy.
The inquiry shall be completed and the report is to be submitted to the Prime Minister within a fortnight (06th February 2020).
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ECC allows import of 300,000 tons wheat
ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Monday allowed 300,000 tons of wheat to ensure sufficient supply of the commodity and reducing prices in the domestic market.
A meeting of the Economic Coordination Committee of the Cabinet (ECC) chaired by Adviser to the Prime Minister on Finance and Revenue, Dr. Abdul Hafeez Shaikh on Monday allowed import of 0.3 million tons of wheat to decrease the local wheat price and meet the domestic requirement.
Under the decision, the wheat would be imported by the private sector by withdrawing regulatory duty to the extent of the approved quantity.
The ECC further decided that the wheat to be imported under the ECC decision would be allowed in the country until March 31, 2020 to ensure that the local wheat to be available from the start of April was picked up at the right price from the market.
The ECC also issued instruction for the immediate release of stocks held by the PASSCO and the provincial departments.
Besides the import of wheat, the ECC approved a proposal by the Ministry of Industries and Production to reduce the GIDC on gas consumed by the fertilizer manufacturers from Rs 405 to Rs 5 per bag so that this benefit could be passed on to the farmers.
ECC also allowed the raising of Rs 200 billion on the request of Ministry of Energy (Power Division) from the Islamic Banks as fresh facility through Power Holding Limited by way of issuance of Pakistan Energy Sukuk-II against assets of the DISCOs/GENCOs as collateral through open competitive bidding to procure financing in a fair and transparent manner.
The amount will be utilized for the purpose of the funding the repayment liabilities of the DISCOs.
ECC approved the proposed mechanism by the Ministry of Finance for the grant of Sovereign guarantees. All requests for government guarantees are to be accompanied by request for guarantee by the governing body of PSE’s.
Further
• Every request must be reviewed and endorsed by the concerned Administrative Ministry/Department of the relevant entity.
• Audited Financial statements of previous year prior to issuance of guarantee is mandatory for evaluation of guarantee request
• Business plan including an explanation of the business model and financial projections for at least 5 years;
• A note explaining the following;
1. Whether its need for guarantee is short term or long term.
2. Business model followed by the entity since inception or over the last 5 years, whichever is less
3. Financial as well as non-financial performance of the entity since its inception or over the last five years, whichever is less
4. Request, along with justification, for the type and amount of guarantee needed by the entity and the timelines over which it is required The Finance Division shall evaluate the request internally and finalize its recommendations with the approval of the Finance Secretary.
ECC also approved the report on proposed exemption of 5% sales tax on cotton seed cake.
It was briefed to the ECC that in case the exemption of sales tax on Cotton Seed Cake cannot be introduced during CFY 2019-2020, the same can be considered for inclusion in the Finance Bill of 2020-2021.
The approval of Technical Supplementary Grant of Rs. 96.652 million of National Book Foundation in favor of Ministry of Federal Education and Professional Training was also granted by ECC.
Technical Supplementary Grant amounting to Rs 15 million for centralized procurement of ICT infrastructure to ensure e-readiness of Federal Government for implementation of E-Governance program was also approved.
ECC granted approval to the request of the Ministry of Interior for the Technical Supplementary Grant amounting to Rs458 million for payment of subsistence allowance to Personnel of Civil Armed Forces deployed in UN Peacekeeping Missions.