ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet on Tuesday approved import of 250,000 tonnes of wheat immediately as prices of the US red wheat declined to $297 per tonne from $600 in the international market.

The third ECC meeting that was chaired by Prime Minister Syed Yousuf Raza Gilani also approved export of 50,000 tonnes of wheat to Afghanistan in addition to their annual requirement to avert food crisis.

Against a total requirement of 1.5 million tonnes of wheat import, the coalition government does not want to bring the whole quantity on immediate basis owing to lack of storage capacity as well as avoiding to push up the dwindling wheat prices in the international market.

On the current wheat situation, the meeting was informed that the estimated procurement target of wheat for the year 2008-09 was 5 million tonnes, out of which a total of 2.121 million tonnes (42%) has already been procured as compared to 2.054 million tonnes in the corresponding period last year.

The sources said the ECC was informed that Punjab procured 1.272 million tonnes till May 5, 2008 against 1 million tonnes in the same period of the last year. The procurement target of Punjab is 3 million tonnes for 2008-09.

Against the procurement target of 600,000 tonnes of wheat, Sindh has procured 3,89,000 tonnes of wheat by May 5, 2008 against 4,69,000 tonnes in the same period of the previous year.

Passco was given procurement target of 1.4 million tonnes of wheat and it has so far procured 4,50,000 tonnes of wheat against 5,85,000 tonnes in the same period of the previous year. “The prime minister directed the Ministry of Food & Agriculture to ensure food security and take all necessary measures to overcome food shortage all over the country,” said the official.

As regards the export of wheat to Afghanistan the prime minister directed that it should be undertaken on government-to-government level only. He said that Pakistan would continue to provide wheat/wheat flour to Afghanistan as per past practice.

The meeting also decided to strengthen anti-smuggling measures to check wheat smuggling. In order to ensure the availability of atta at an affordable price through Utility Stores Corporation (USC), the prime minister also directed constitution of a committee to take concrete measures for launching a scheme enabling the poorest of the poor to get subsidized essential food items.

The committee would consist of representatives from the Ministry of Finance, Industries, Social Welfare and Nadra to prepare a database that target only the needy household. Regarding the ban of wheat to the feed industry, the prime minister directed that alternative options be sought for the food industry, as it is the second largest industry of the country.

While observing that the rice production is 3 million tonne surplus in Pakistan against a total production of 5.5 million tonnes, the ECC decided that the export of rice must be undertaken only after meeting the domestic requirements standing at 2.5 million tonnes and after ensuring the stability of the prices.

The ECC approved the agreement between Government of Pakistan and Rice Export Association of Pakistan (Reap) by fixing minimum export price of rice in order to avoid exporting rice at throw way prices as well as getting rid of under invoicing.

The minimum export price of super basmati was approved at $1500 per tonne, basmati rice $1300 per tonne, irri-6 rice $750 per tons and irri-9 $1000 per tonnes.

This price had to be effective from May 1, 2008 as contracts signed till April 30, 2008 will not apply the minimum export price of rice. The Reap also agreed to the government for providing 0.2 million tonnes rice at fixed prices to the Utility Stores Corporation (USC). It was also approved that the Reap would ensure buffer stock of 0.3 million tonnes additional rice for the government in order to stabilize prices in the domestic market. The government assured the Reap through this agreement that such mechanism would be implemented till July 2008 and then the government would review the situation for bringing any changes in this policy.

The ECC authorized Minfal to undertake negotiations with the well known American multi-national company “MONSENTO” aimed at introducing technology for genetically modified seed as it is the major reason for reduction of cotton crop in Pakistan from 14 million bales to 11 million bales this year. Chairman FBR informed the meeting that FBR had so far collected Rs761 billion by 30th April, 2008 and expressed the confidence that the revised target of Rs990 billion would be met during the remaining two months of the current financial year.