Pakistan wheat traders reject TCP import plan, warn of billions in losses

Pakistan's wheat traders have opposed a reported government proposal to import wheat through the state-run Trading Corporation of Pakistan (TCP).

The Cereal Association of Pakistan (CAP) said the move could cost the exchequer billions of PKR and reverse the country's wheat market deregulation. CAP urged the government to allow subsidy-free private sector wheat imports instead.

Why do wheat traders oppose the TCP import plan?

CAP chairman Muzammil Chappal said government-managed imports have historically caused major financial losses and required billions of PKR in financing. He said the private sector had already proven it could maintain steady wheat supplies without subsidies. Chappal called on the government to uphold its decision to fully deregulate wheat imports, announced two years ago.

"The government should refrain from intervening in the wheat market and uphold its decision to fully deregulate wheat imports," Chappal said. He added that the private sector did not need state support to keep supplies stable. CAP said it had already submitted a formal proposal to the federal government on the issue.

How much wheat has the private sector imported without subsidies?

Private importers brought in about 2.7 million metric tons of wheat during fiscal year 2023-24 without any subsidies or public financing, according to CAP. The association said these imports helped stabilize domestic supplies of both wheat and flour. Chappal said the imports also helped bring down consumer prices.

What is happening to wheat prices in Pakistan?

Wheat prices had reached PKR 123 per kilogram before private sector imports entered the market, Chappal said. Prices later fell to around PKR 95 per kilogram once private imports increased supply. CAP said wholesale wheat prices in Karachi currently stand at around PKR 120 per kilogram.

Chappal warned that prices could climb to PKR 125 per kilogram if imports are delayed further. He said allowing private sector imports in line with international market trends could instead push prices down to between PKR 95 and PKR 100 per kilogram. Commercial imports driven by market demand were more effective at stabilizing prices, he said, while avoiding the fiscal risks tied to government procurement and storage.

How much surplus wheat stock does Pakistan currently hold?

Pakistan is currently holding around 450,000 metric tons of wheat that is two years old, Chappal said. He added that stocks held by the Pakistan Agricultural Storage and Services Corporation (PASSCO) were reportedly deteriorating in storage. Chappal cited this as evidence against returning to state-controlled wheat imports.

What is CAP demanding from the government?

CAP called on policymakers to maintain a transparent and liberal wheat import regime. The association said private sector participation would keep prices affordable for consumers while protecting public finances. "The government should not repeat past mistakes by returning to state-controlled wheat imports," Chappal said.