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ECC proposes Rs1600 per 40kg wheat support price - Inside Financial Markets

ECC proposes Rs1600 per 40kg wheat support price

-Associated Press of Pakistan

The Economic Coordination Committee (ECC) of the Cabinet Monday decided to propose to the cabinet Rs 1600 as minimum support price (MSP) per 40 kilogram for the upcoming wheat crop 2020-2021.

The cabinet committee, meeting of which was chaired by Adviser to the Prime Minister on Finance Dr. Abdul Hafeez Shaikh, was briefed that the support price mechanism plays a pivotal role in boosting wheat production as it stabilizes market and increases profitability of the farmers.

It was informed that since 2010-2011, MSP for wheat has been revised 4 times and the new price which has been decided by the ECC was close to the price recommended by Punjab, which is the largest producer of wheat in the country.
ECC was also apprised of the Status of wheat import by the Trading Corporation of Pakistan (TCP) and was informed that till January 2021 TCP would be able to secure one million metric tons of wheat through international bidding.

On the request of Ministry of National Food Security and Research (MNFS&R), the cabinet committee decided that the initial allocation of TCP for the import of 1.50 MMT of wheat may be enhanced to 1.80 MMT to cater for the additional requirement of 0.30 MMT demanded by the Khyber Pakhtunkhwa and Sindh for shipment by mid-February.

It was also decided that 300,000 MT of wheat would be imported on government-to-government (G2G) basis from the Russian Federation by PASSCO. ECC endorsed the request of Ministry of Food to import another 320,000 from Russia under the G2G arrangement but constituted a Committee of Secretaries of Finance, Commerce and Food Ministry to look into the possibility of import of wheat either by PASSCO or TCP.

It was also decided that further tendering of wheat may be stopped and TCP may resort to G2G arrangement for additional procurement of wheat. Keeping in view the arrival of the new crop in March 2021, the forum decided that no vessel of imported wheat should be arranged either in public or private sector beyond February 2021.

The cabinet committee also decided to release 50% of the tariff differential subsidy to the Power Division. Finance Division has earmarked Rs.140 for 2020-21 as Power Division subsidy.

The release of Rs.65.8 billion demanded by the Power Division will be used for payments to the power producers in order to maintain adequate liquidity.

On the summary moved by the Ministry of Industries and Production for the determination of Gas rate for operations of Fatima fertilizer and Agritech, ECC decided that gas rate of PKR 772/MMBTU with Variable contribution [email protected] 186 per bag may be offered to both the units for the period 3rd November 2020 onwards.

It was briefed to the ECC that government ‘s share at this gas rate has been estimated by NFDC on the basis of RLNG’s last notified rate for July by OGRA, which is approximately 0.42 Billion. Further, actual payment by GoP for price differential sum to SNGPL may vary due to difference in monthly rate of RLNG.

ECC granted approval for the sale of surplus power available at the incremental rate of Rs. 12.96/kwh to all industrial consumer categories, excluding zero-rated industrial consumers, on the incremental consumption over their respective historical consumption or established benchmark.

ECC also formed a committee consisting of Dr. Ishrat Hussain, Dr. Waqar Masood, Federal Minister for Industries and Production, Hammad Azhar, Federal Minister for Power, Omer Ayub, SAPM Nadeem Babar and SAPM Tabish Gohar to prepare a proposal to include K-Electric in the package.

The Committee will also propose whether the package would continue for one year or three years. The Committee would also analyze the need for any subsidy that would be involved in the package and source for arranging the same and all the issues that may come up in the calculation and distribution of that subsidy.

Syed Zaki Hussain

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