Approval to Sell Expensive Imported Wheat at Subsidized Rates May Cost National Treasury 20.5 to 22 Billion Rupees
According to sources, the Cabinet’s Economic Coordination Committee (ECC) has approved the auction of 500,000 tons of wheat by PASCO and the provision of 300,000 tons to Punjab. The meeting was chaired by Federal Finance Minister Muhammad Aurangzeb.
In 2022, 294,994 metric tons of wheat were imported and are currently stored in PASCO warehouses, while the PASCO organization is being phased out. The ECC approved the auction of PASCO’s 500,000-ton wheat stock through competitive bidding to manage surplus stocks, reduce storage costs, and stabilize local wheat prices to ensure food security.
The Finance Division had proposed a reserve price of 4,742 rupees per 40 kg for local wheat and 6,425 rupees per 40 kg for imported wheat. However, the ECC approved a reserve price of 4,400 rupees for local wheat and 4,070 rupees for imported wheat. At this rate, selling imported wheat will result in a loss of 2,355 rupees per 40 kg for the treasury.
The ECC was informed that disposing of 500,000 tons of wheat at these prices could cause a financial loss of 20.5 to 22 billion rupees, although the annual cost of storing this quantity exceeds 11 billion rupees. PASCO currently holds a total wheat stock of 2 million tons, and the federal cabinet decided last month to close the organization.
This decision highlights the government’s poor economic and trade planning, as it first imported expensive wheat and is now selling it at a subsidized rate. The Finance Ministry will provide nearly 20 billion rupees in subsidies to dispose of the wheat stock, with 9 billion rupees to be paid immediately. The ECC was informed that PASCO still holds 294,994 metric tons of imported wheat from 2022, which is gradually losing market value compared to fresh imports.
