ECC permits imports of urea and wheat.
Importing $300 million worth of goods will help make up the difference.
ISLAMABAD: Pakistan permitted the import of urea and wheat worth roughly $300 million on Friday through open tenders after attempting to do so through government-to-government agreements failed in an effort to fill the anticipated shortage in the upcoming months. The Economic Coordination Committee (ECC) of the cabinet authorised the state trading agency to investigate alternatives for the import of an additional 800,000 tonnes of wheat in addition to approving the tender for the import of 380,000 tonnes of wheat at a cost of $373 per tonne.
380,000 tonnes are priced at $142 million, while 800,000 tonnes will have a final price after the deals are closed. The ECC, under the direction of Finance Minister Ishaq Dar, approved the release of a million tonnes of imported wheat from government stockpiles to supply the provinces’ daily needs. The ECC approved the Trading Corporation of Pakistan (TCP) to enter into a contract for the import of 300,000 tonnes of urea at the lowest price of $520 per tonne. On October 19, 2022, TCP published a global tender, which was opened on October 26. The lowest responding price from the three bidders was $520 per tonne, which would have cost the nation $156 million.
Both commodities are in low supply, which may affect the nation’s food security if timely imports are delayed. Azerbaijan, China, Saudi Arabia, and Iran were among the countries from whom the government attempted to acquire urea on a deferred payment basis. But no country expressed interest. Urea was advised to be imported right away by the Ministry of National Food Security and Research in order to prevent a shortage of this crucial component for planting wheat. The 6th International Wheat Tender 2022, which began on October 26 and was awarded for 380,000 tonnes at $373 per tonne, was approved by the ECC. If 1.6 million tonnes of wheat are not imported before the beginning of the following crop in April, the government will still have a difficult time supplying domestic demand.
Due to insufficient foreign exchange reserves, Prime Minister Shehbaz Sharif rejected a plan to permit the private sector to import 800,000 tonnes of wheat. On Friday, the Ministry of National Food Security submitted a summary for the government’s import of 800,000 tonnes of wheat via the TCP. According to a submission, the ECC authorised the TCP to import 3 million tonnes of wheat in May 2022 and instructed them to develop import procedures.
Through an international tender, the TCP was given permission to import one million tonnes of specific milling wheat after the necessary mechanisms were developed. The actual gap would be 2.6 million tonnes rather than 3 million tonnes, according to further verification of public wheat supplies.
As a result, of the remaining 1.6 million tonnes, the TCP was only permitted to import 800,000 tonnes through an open tender as well as through government-to-government basis. The idea was approved by the ECC, and the TCP was given permission to arrange for the import of the remaining 800,000 tonnes through a G2G agreement or open tender before the fresh crop was harvested.
The meeting was however informed that attempts to acquire wheat from Russia under a G2G agreement had failed. The cabinet committee was warned that if the extra wheat was not imported right away, there might be a shortage of the good by March of the following year. Wheat inventories at Pakistan Agriculture Storage and Services Corporation (Passco) are 3.5 million tonnes, but they will go negative if extra provincial demand is not fulfilled without further imports.
Regarding the demands of the food departments of Punjab, Sindh, Khyber-Pakhtunkhwa, and Balochistan for an additional supply of imported wheat from Passco reserves, the Ministry of National Food Security provided another summary. The ECC authorised the provision of one million tonnes of imported wheat from Passco inventories in consideration of the urgent demand from the provinces and subject to the consent of the relevant provincial cabinets. In response to an additional demand for one million tonnes, Punjab will receive 500,000 tonnes. Khyber-Pakhtunkhwa will receive 200,000 tonnes, while Sindh will receive 300,000 tonnes. But the full cost and additional fees will be covered by the provinces and paid to Passco.
Balochistan may also receive 40,000 tonnes of wheat, split 50/50 between domestic and imported varieties, at full cost and with incidentals from Passco. The Import Policy Order 2022’s import restrictions on the import of wood and timber were suspended, according to a summary provided by the Ministry of Commerce. The ECC instructed the Ministry of National Food Security’s Department of Plant Protection (DPP) to review the requirements for the import of wood and timber and bring them into compliance with global best practises in order to prevent the import from being subjected to pointless and onerous procedures.
However, the ECC agreed the proposal to delay the date of implementation of Import Policy Order 2022 on the import of timber and wood to March 31, 2023 in order to resolve the immediate concerns of the wood/timber business. The Interior Ministry would get a technical Supplementary grant of Rs334 million from the ECC in the current fiscal year 2022–2023, allowing Frontier Constabulary to create a 2000-person antiriot squad.
