The provincial government’s decision to stop buying current season’s wheat crop has worried farmers in Sindh.
According to the industry officials, the stock is piling up in farms with prices indicating an oncoming crash.
They further estimated that farmers are likely to suffer massive losses of Rs. 30 billion due to Sindh government’s decision of not procuring wheat this year. The province is expecting a bumper crop of around 4.2 million tons.
The growers are demanding an increase in support price to Rs. 1,400 this year, up from Rs. 1,300/40 kilogram last year. Instead, the provincial government has decided not to buy wheat from growers, who would have to sell it in the open market.
According to sources, the said price of wheat remained around Rs. 1,100/40kg with delivery in Karachi. However, middlemen were purchasing it at around Rs. 900 to Rs. 950 from the growers on the farms. “If the government is not buying, the wheat price will not go above Rs. 1,000/40kg,” said a top flour miller.
Mumtaz Shaikh, a leader of Pakistan Flour Mills Association, said the decision of the Sindh government to not procure wheat, would be a death sentence for the growers. “The growers will die,” he emphasized.
Earlier in February, the cabinet of Sindh had decided not to purchase wheat from growers and export 0.5 million tons of wheat this year out of 0.8 million tons.
The cabinet was informed that Sindh Food Department had taken a loan from different banks of Rs. 135 billion for the purchase of wheat in the province, of which Rs. 35 billion has been paid off so far.
However, growers rejected this claim and said that what the food department procured was later sold to the private flour mills at higher prices. The government purchased wheat at Rs. 1,300/40kg from growers, while it was being sold to the mills at Rs. 1,350, which showed that it was not selling the commodity at a loss.