Pakistan: ECC maintains wheat support price for 2023-24

The Economic Coordination Committee (ECC) of the Cabinet declined the Ministry of National Food Security and Research’s proposal to elevate the support price of wheat for the upcoming crop year (2023-24) to Rs 4,000 per 40 kg. Instead, the ECC has chosen to retain the previous year’s support price of Rs 3,900 per 40 kg.

The decision, reached after consultations with provincial governments, aims to provide consistency and avoid a substantial increase seen in the support price during 2022-23.

The Food and Agriculture Ministry’s summary highlighted that the ECC, in its March 1, 2023 meeting, fixed the profitable support price at Rs 3,900 per 40 kg, allowing for a 44 percent profit margin.

This adjustment was made in response to the challenges posed by the 2022 floods and economic constraints in rural areas. The ECC considered the average cost of production for an average farmer at Rs 2,495 per 40 kg.

The ECC also received data from the Pakistan Bureau of Statistics (PBS), indicating an average wheat price of Rs 4,939.38 per 40 kg and wheat flour at Rs 2,831.33 per 20 kg. Additionally, the International Grains Council reported Black-Sea wheat prices at USD 245/MT (FOB) or USD 323/MT (CNF) at Karachi.

To address the demand-supply gap of 2.40 MMT in the country, the private sector has been encouraged to import wheat. As of December 4, 2023, 20 private vessels have imported 1,147,795 MT of wheat, with an additional 1.00 MMT expected by the end of February 2024.

Due to delays in provincial responses, the announcement of the support price has been postponed, impacting the ideal time for wheat sowing in mid-November.

The recommendations from provincial governments varied, with Punjab proposing Rs 4,000 per 40 kg, followed by Sindh at Rs 4,000, Khyber Pakhtunkhwa at Rs 4,100, and Balochistan at Rs 400 per 40 kg.

The Ministry of Finance and the Ministry of Commerce have supported the Ministry of NFSR’s recommendation to set the profitable support price at Rs 4,000 per 40 kg. The summary has been forwarded to the ECC for consideration.

Tags: support price, Production, wheat, crop, ECC, The Economic Coordination Committee