Re: Scandal in the making: Wheat production numbers exaggerated
told u guys. scandal in the making. Looks like someone was over efficient with the numbers at Min of Fin. trying to round off the growth rate figure. Dont blame them. I think its cool. Gots to keep the traditions alive :biggthumb
Wheat crop estimates lowered to 22.2m tons](http://www.dawn.com/2007/09/19/top10.htm)
- By Khaleeq Kiani*
ISLAMABAD, Sept 18: In the wake of the government’s inability to check the continued surge in flour prices, its agencies have started to confirm that the earlier wheat crop estimates were untrue, raising fears that the worse in price hike is yet to come.
** According the Trading Corporation of Pakistan (TCP), the 2007-2008 wheat crop is 22.2 million tons, much lower than the original government estimates of 23.5 million tons. It also says that the landed cost of wheat is no less than Rs22.5 per kg, which is double the officially fixed issue price of wheat stocks in the public sector. **
The TCP presented the latest estimates to the prime minister and the ministries concerned on Monday.
** Informed government sources said the wheat production estimates were increased to 23.5 million tons in order to achieve a 7 per cent GDP (gross domestic product) growth target for the fiscal year ending June 30, 2007. **:biggthumb
** “If the difference of 1.3 million tons between the government’s original estimates and the TCP’s estimate is taken into account, the GDP growth rate for fiscal year 2006-07 would tumble down perhaps to 6.5 per cent or even less,” says a retired government official who served for years as a member of the National Accounts Committee.**
The TCP says the nation will face this year a shortfall of not less than 1.6 million tons that may go up to 2.1 million tons. This will mean that the government’s belated decision to import 1 million tons of wheat will not resolve the crisis and calls into question the earlier decision of allowing half a million tons export at the start of the season.
A total of 0.8 million tons of wheat was exported or smuggled out of Pakistan this year, according to TCP Chairman Abdul Malik. This again contrasts with the government’s public position that 0.5 million tons were exported through legal means and 1.5 million tons smuggled out. The TCP reached these conclusions after receiving instructions from the government to make arrangements for wheat imports.
Estimates now suggest that after allowing up to 2 million tons of wheat for local feed (cattle and poultry) market, accounting for 21.5 million tons of flour consumption, the overall deficit should be expected at 1.6-2.1 million tons. It would also be interesting to note that total procurement by the public sector this year stood at 4.6 million tons compared with almost 40 per cent higher procurement of 7.5 million tons last year.
** The report says that current price of local wheat at Rs13.50 per kg will keep growing and cross Rs15 per kg within the current month.** On the contrary, the cheapest US soft white wheat could be imported at $280 per tonne FOB (freight on board), which would translate into a landed cost of Rs22.50 per kg. This would mean that the sale price could be even higher than Rs23.50 per kg.
The TCP has proposed that the government should promptly import wheat through the TCP to make up for the shortfall in the procurement quantities and in the overall requirement to control consequential surge in local wheat and flour prices. It may be noted that Pakistan exported half a million tons of wheat at around $220 per tonne earlier this year while it would be compelled to import one million tons at around $350 per tonne, causing a loss of about $130 million.:biggthumb
The entire “importation should be done by the TCP” to enable the government to either use the Pakistan Agricultural Storage and Supplies Corporation (Passco) and food departments to take direct deliveries and then sell to the flour mills under quota at support prices or the TCP be allowed to sell to flour mills directly through local tenders. The advantage of selling wheat to flour mills through local tenders, according to the TCP, would be that the government could obtain better prices – something between prevailing local market and the price at which quota wheat is sold to mills from GOP stocks, thereby reducing the overall subsidy amount.
The word of wisdom from the TCP is that the private sector should not be involved at all in the import process because international prevailing prices of wheat will require the government to provide subsidy and in the absence of any such mechanism no private party will be able to import a grain. On the other hand, this will push up the local price of wheat drastically as it will be established that there is not sufficient wheat available in the country and that the prices in the local wheat market are below the landed price of imported wheat.
awwww. Poor Pakis. Get shafted again. In Ramadan. Where’s the savior when u need him.:no: