Local wheat prices 16pc higher than world market due to govt wheat support price

[Naveed Yaseen]

ISLAMABAD (January 01 2009): The procurement price of wheat in the domestic market is greater than that prevailing in the international market. This was stated by Additional Secretary of the Ministry of Food, Agriculture and Livestock (Minfal), Shahid to Business Recorder.

In the international market, wheat prices on December 19 were $244 per ton (Rs 761 per 40 kg) which rose to $256 per ton (Rs 798/40 kg) ten days later. In contrast, wheat procurement price locally is Rs 950 per 40 kg.

According to the Letter of Intent (LoI), submitted by the government of Pakistan, a reflection of the commitment made to the International Monetary Fund (IMF) as part of the standby arrangement, "wheat procurement prices have been raised to international levels." This step was part of a number of measures consistent with the envisaged fiscal adjustment in 2008/09.

Officials said that the government had adjusted the wheat procurement price for 2008-09 much before the terms and conditions of IMF were accepted. "Our wheat procurement price is 16 percent more than that of wheat price in international market these days.

Our basic purpose is to ensure that the wheat growers get a better return on their crop in 2008-09 as compared to last fiscal year. Moreover, the wheat price in the international market fluctuates. So, we need to adjust the price according to our own domestic requirements", Shahid said.

http://www.brecorder.com/index.php?id=859413