The federal government has decided to exit the wheat procurement process in line with another condition of the International Monetary Fund (IMF) program, ending state-led purchases and the support price mechanism, according to a national daily.
The federal and provincial governments will now maintain only emergency wheat stocks, with total annual reserves capped at 6.2 million metric tons. Strategic reserves will no longer be procured by the government; instead, a private company will handle wheat purchases for both the federation and the provinces.
Under the new arrangement, the federal government will hold 1.5 million metric tons of wheat, Punjab 2.5 million metric tons, Sindh 1 million metric tons, Khyber Pakhtunkhwa 0.75 million metric tons, and Balochistan 0.5 million metric tons.
The private company will be responsible for purchasing wheat on behalf of the federation and provinces.
Sources said the Ministry of Industries and Production has confirmed that the private company will also arrange financing and storage. The government will only pay service charges, a move expected to save an estimated Rs. 570 billion annually.
The Ministry of National Food Security has allocated Rs. 30 billion for service charges. There will be no wheat support price, and prices will be determined in line with global market trends, using international benchmarks set by the ministry.
The IMF has also prohibited the federal government from fixing a support price for wheat. Previously, the government provided bank guarantees for wheat purchases, while the Pakistan Agricultural Storage and Services Corporation (PASSCO) carried out procurement.
Delays in payments to PASSCO contributed to food sector circular debt, which has now reached Rs. 270 billion.