Pakistan Economy - News & Updates - Archive

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Over 65 percent increase in FDI from China

KARACHI (April 22 2006): Foreign Direct Investment (FDI) from China in Pakistan has increased by over 65 percent as 34 million dollars FDI was made in the year 2004-05 against 20.59 million dollars in 2003-04.

According to Board of Investment (BoI) figures available here, the flow of FDI from China in Pakistan was 15.8 million dollars in the first six months of the current fiscal 2005-06.

The figures show that a tremendous increase was recorded in FDI from China in Pakistan, as this figure was only 1.02 million dollars in 1998-99, which has now increased by over 3,200 percent in the last eight years.

The FDI flow trend showed an upward trend in 2002-03 when the figure went up to 8.61 million dollars against only 3.03 million dollars in the year 2001-02 and jumped up further to 20.59 million dollars in 2003-04.

"Although a tremendous increase was witnessed in FDI flow from China to Pakistan during the last few years, still it was lower than its real potential", the Board of Investment officials said.

They said that Pakistan and China, being the two top growing economies in the world, had been enjoying very close trade relations and there is enough potential to further increase FDI flow from China to Pakistan.

According to State Bank figures the total FDI inflow was recorded at 9.3 billion dollars during 1990 to 2005 with the major share of 35.1 percent from the USA. This was followed by 18.5 percent from the UK, 9.5 percent from UAE, 4.6 percent from Japan, 2.8 percent from Germany, 2.1 percent from Korea and 27.4 percent from all other countries.

Regarding the sectoral FDI, these figures show that 24 percent FDI flow was recorded in services sector followed by 21 percent in manufacturing sector, 20 percent in oil, gas, mines & quarrying sector, 15 percent in power sector, 11 percent in IT & telecom sector and 9 percent in other sectors.

Pakistani officials expect that FDI flow from China would increase in future as many Chinese companies are coming to Pakistan to invest here in different sectors.

Presently 31 Chinese companies including 11 companies in engineering sector, 5 in oil & gas, 3 in infrastructure, 3 in mining, 2 in IT & telecom, 2 in power, 2 in automobile and 3 other companies are working on different projects in the country.

Chinese public sector major projects in Pakistan include: Karakoram Highway, Pakistan Aeronautical Complex-Kamra, Heavy Mechanical Complex-Taxila, Saindak Metal (Copper/Gold), Islamabad Sports Complex while the ongoing projects are Gwadar Deep Sea Port, Coal Fired Power Plant Lakhra, Thar Coal Power Development and Chashma Nuclear Power Plant Expansion.

The upsurge in bilateral trade which was 2,848.9 million dollars in the year 2004-05 as against 1,226.61 million dollars in 1999-00 indicates that trade relations are increasing between the two countries with every passing day.

 

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DOHA (updated on: April 22, 2006, 21:10 PST): Iran, Pakistan and India are close to signing a gas pipeline deal, the Iranian and Pakistani oil ministers told Reuters on Saturday, defying US opposition to the project.

Iranian Oil Minister Kazem Vaziri said he had an understanding with India and Pakistan and was unconcerned by US opposition.

"We have a very good understanding," Iranian Oil Minister Kazem Vaziri told Reuters. "They are willing and Iran is ready."

Asked when the deal would be signed, he said only: "I hope we are going to have a ministerial meeting in Tehran in June," adding it would be attended by the same three ministers.

Speaking after talks with his Iranian and Indian counterparts on the sidelines of the International Energy Forum in Doha, Pakistan's oil minister Amanullah Khan Jadoon told Reuters only technical issues had to be resolved.

The $7 billion pipeline through Pakistan would link Iran's abundant gas reserves, the world's second biggest, to India's booming economy.

It would carry 150 million cubic metres per day of gas for 25 years, Vaziri said.

The Indian oil minister Murli Deora declined to comment following Saturday's talks.

 

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Good job man keep up the good work

Thank you Sir!
Feel free to contribute anything interesting you find in the media.

 

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ISLAMABAD (updated on: April 22, 2006, 20:23 PST): President General Pervez Musharraf on Saturday said the government is pursuing a far-reaching Human Resource Development (HRD) strategy to lay firm foundations for befitting utilisation of power potential of the nation for Pakistan's sustained development.

Addressing the Students' Convention 2006, the President said the wide-ranging human resource development strategy revolves around poverty reduction, realisation of better health facilities and improved standards of education at all levels.

"Our objective is to blend higher education with requirements of industrial progress - at the same time, we are setting up technical institutes under a separate department to raise a skilled workforce - these steps will certainly bring more foreign investment and lead to continued development," he stated.

The President particularly emphasised the vital importance of equipping the younger generation with high quality of education and said his government had realised its crucial role and increased the budget manifold.

"The budget for higher education has been increased from a mere Rs 500 million in 1999-2000 to Rs 11.2 billion this financial year," he said amid rousing applause from the best and brightest students of universities from across the country.

Similarly, he said, the overall annual budgetary allocations for education have seen an unparalleled rise during this period.

In his more than three hours interaction with the students, the President spoke about a host of challenges facing the country and vowed to gear all for its socio-economic progress through proper use of its human capital and natural resources.

President Musharraf, who listened the speeches of the finalists, informed the gathering that the focus on human resource development has been possible due to economic turnaround the country has achieved in the last six years.

"Pakistan's economy has been put on the path of high economic growth and now the international magazines include the country among the fastest growing economies," he said.

Listing some of the steps taken by the government to pass the benefits of economic growth to common man, the President said he himself is overseeing progress in the areas of provision of safe drinking water, electrification of villages, supply of gas, improvement in the health facilities and education sector.

Replying to a question, the President said he is committed to addressing some of the lingering issues including the construction of water reservoirs and problems retarding grassroots development in Balochistan.

"I want to address these issues in the interest of continued development of Pakistan."

Speaking on Balochistan, he said an overwhelming majority of people in the province wants socio-economic progress and observed that only a handful of anti-development elements are creating hurdles in the way of their common man's progress.

"They do not want to see the people progress and prosper as they want to perpetuate their rule over them," he said.

The government, he said, will establish the rule of the law all over the province and also provide economic opportunities to the common man.

Describing the students in Quaid-e-Azam's words as "real makers of Pakistan" the President asked the gathering to have firm confidence in the country's ability to progress.

"Pakistan is our identity, our dignity is directly related to the dignity of our homeland," he said.

He termed the world as inter-dependent and stated that a nation's sovereignty is related to its dependence on others, particularly in the area of commerce.

President Musharraf said Pakistan has earned an elevated status in the comity of nations due to its wise policies. The country has nuclear and missile capability and is a pivotal member of the Muslim world.

"All the Muslim countries look up to Pakistan to play a lead role in these times," he said.

On development of the backward areas, the President said the government is committed to bringing long-denied socio-economic progress to the common people.

In this respect, he announced that the government has chalked out a plan to spend Rs 10 billion each year on development of federally administered tribal areas.

"We are striving to remove any sense of deprivation and forge unity and solidarity in the nation," he said to rousing appreciation from the gathering.

He made a particular mention of the mega development projects under completion in Balochistan and added that the province has received more development allocations than the largest Punjab province.

"We are spending well over Rs 100 billion on projects like Gwadar deep sea port, a network of highways connecting the province with other parts, and realising water projects in Quetta and other areas - these will certainly bring development at grass roots level."

In his address, the President also informed the students about the government's reconstruction and rehabilitation plans in the quake-shattered areas of NWFP and Kashmir and said the country is being cited as a textbook example in dealing with the natural disaster of immense proportions.

"Nobody died of hunger, there were no deaths due to lack of protection against winter and no epidemics as feared by some observers," he said, recounting a range of measures that streamlined the nation's relief efforts in the aftermath of October 8, 2005 catastrophe through organised work by the Pakistan Army and the government agencies.

He said a good leader must respond to the tragedy of such huge proportions calmly: he should visit the zone and meet with people to inspire confidence; assess the situation ; put in place an organisation to deal with the disaster; select a leader to head such an organisation; devise a comprehensive strategy; implement it and review these efforts regularly.

 

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ISLAMABAD (April 22 2006): The Public Sector Development Programme (PSDP) 2006-07 is being projected at Rs 342 billion, showing an increase of Rs 60 billion over the current PSDP, it is learnt. The 2005-06 PSDP stands at Rs 272 billion, highest allocation in Pakistan's history so far.

The province-wise summary of PSDP utilisation for 2004-05 and 2005-06 shows that this year the provinces were released Rs 68 billion, against Rs 54 billion of last year. Province-wise break-up showed that from the current PSDP Punjab got Rs 32.4 billion against Rs 25.9 billion of last year, Sindh was released Rs 14.1 billion, against its share of Rs 9.2 billion in last year PSDP.

NWFP and Balochistan were released Rs 14.5 billion and Rs 7 billion against their share of Rs 11.4 billion and Rs 7.6 billion respectively. Balochistan, in addition to its share of Rs 7 billion from PSDP, was released Rs 3 billion under Khushal Pakistan Programme (KPP) Fund.

PSDP utilisation for the first nine months of the current fiscal year stood around 65 percent. Historically, PSDP utilisation in the past was very low.

Sources said that the highest ever utilisation and timely release of funds for development schemes made the current PSDP different from the previous programs. They said that this time the executing agencies were asked to monitor progress of work of their respective schemes for 2005-06, very closely to ensure that funds were utilised judiciously and without any hassle. The Planning Commission is conducting quarterly review of PSDP to ensure that none of development projects suffers due to paucity of funds.

An official, who is a part of the Planning Commission team conducting the quarterly review of PSDP 2005-06, told Business Recorder that with the exception of a few all PSDP schemes were on target. He said: "We are evaluating the performance of each executing agency very closely to ensure that PSDP-funded schemes are completed on time."

He claimed that a tight monitoring policy had made the current PSDP different from the previous ones and the same approach would be followed in the future to further improve the utilisation of public sector funds.

Sources said that availability of enhanced financial resources prompted the policy makers to go for substantial increase in 2006-07 PSDP. They were of the view that more allocations would help the Centre and provinces to go more aggressively for major social sector development programmes and provide the people better facilities to improve their living standard.

 

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KARACHI (April 22 2006): The country's readymade garments' export target of $3,252 million for the current fiscal year 2005-06 is in jeopardy mainly due to the tough competition in the international market and increased cost of doing business locally, trade sources told Business Recorder on Friday.

Albeit the exports of Pakistan's readymade garments have witnessed a smart growth of around 14 percent during July 05-February 06 period, which currently stands at $1993 million, compared to $1754 million for the corresponding period of last year, its share in the international market has been declining, gradually.

"The aggregate exports of readymade garments from the country currently stand at $1993 million and we have still to fill the remaining gap of $1259 million in more or less three months. That is quite difficult," said a leading exporter.

"Despite the fact that the exports ratio has increased in terms of value, its share in the country's total export has slashed to 7.7 percent, from last year's 10 percent," he elaborated.

Another exporter pointed out that consistent and hectic efforts of the exporters with the assistance from the government have resulted in market diversification and exploration of new trade avenues.

"We (Pak exporters) have recently explored new markets in Poland and Romania," said a Karachi-based exporter, terming it a 'good omen' for the country's readymade garment exports.

He said that since the EU countries are considered among the biggest markets of the world, Pakistan's exporters have been concentrating meticulously on that region and have been striving to get further trade access in that region.

Baside that, some 800 members of Pakistan Readymade Garments Manufacturers and Exporters Association (Prgmea) across the country are engaged in exporting locally manufactured garments mainly to European Union (EU) countries followed by United States, Canada, United Arab Emirates (UAE) and Japan.

However, in total exports, the trade share of Karachi city is the biggest, followed by Lahore, Sialkot and Faisalabad.

According to statistics, China enjoyed biggest (19 percent) share of United States market in 2004-05. India was 8th in ranking with 3.4 percent, followed by Bangladesh and Pakistan with ranking 10th and 21st and market share of 2.8 percent and 1.7 percent, respectively.

Similarly, regarding EU countries, major chunk of export was claimed by China (13.2 percent), followed by Bangladesh (3.8 percent market share) and ranked 5th, India (2.9 percent) 6th in ranking, and Pakistan stood 11th with 1.1 percent market chunk during 2004-05.

 

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KARACHI (April 22 2006): The Land Utilisation Department has issued Provisional Allotment Letter of 400 acres of land to Prime Transport Limited (PTL) to establish a car assembly/manufacturing plant at Dhabeji.

PTL envisages establishing a car assembly/manufacturing plant for assembly/manufacture of the famous Black Cabs of UK in Pakistan with rated capacity of 6000 units per annum on single shift basis.

The vehicles will be operated by PTL as Satellite Controlled Taxi Service in all major cities of Pakistan and would be exported to African, Asian and Middle Eastern countries from Pakistan. This car manufacturing plant would be established in the proposed industrial estate comprising of an area of 13,000 acres at Dhabeji.

PTL would also establish allied facilities including residential colony for its employees at the proposed industrial estate.

The Sindh Chief Minister Dr Arbab Ghulam Rahim had visited the area recently and announced establishment of new industrial estate in this area. He also visited the site earmarked for allotment to PTL together with the State Minister for Privatisation, Investment and Special Initiatives and Chairman of Board of Investment Umar Ahmed Ghuman and M. Dawood Khan, Chief Executive PTL.

Umar Ahmed Ghuman said on this occasion that the project of PTL was one of the major initiatives on investments. He pointed out that another company intends to establish the buses, trucks and cars of Mercedes Benz in Pakistan and they will also set-up their plant at Karachi.

The government of Pakistan attaches great importance to these projects, which will not only improve the economic conditions of the country but would also provide employment opportunities to the masses.

 

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ISLAMABAD (April 22 2006): President General Pervez Musharraf has lauded efforts of Pakistani scientists for the progress and development of the country. The President made these remarks on the occasion of a dinner hosted to bid farewell to former KRL chairman Dr Javed Arshad Mirza and Pakistan Atomic Energy Commission chairman Pervez Butt at the Aiwan-e-Sadr Friday evening.

The President paid rich tributes to Pakistani scientists, saying it was due to their untiring efforts, dedication and devotion to duty that Pakistan's security had been ensured and the country was on the path of development.

He appreciated the contribution of Dr Javed Arshad Mirza and Pervez Butt to the country and expressed the hope the excellent tradition set by them would be emulated by their successors.

He welcomed KRL chairman Karim Ahmad and PAEC chairman Anwar Ali and said under their able leadership the two vital national institutions would continue to contribute to the national cause.

The dinner was also attended by federal ministers and senior officers of armed forces and scientists of KRL and PAEC.

 

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WASHINGTON (April 22 2006): Adviser to the Prime Minister on Finance and Economic Affairs Dr Salman Shah on Thursday evening said there had been a significant headway in respect of the proposed Bilateral Investment Treaty (BIT) with the United States, which he hoped would be signed soon.

Replying to a question at a press briefing at the Pakistan Embassy, he said basically the aspect of legal interpretation in it was finding a due consideration.

"We will sign a Bilateral Investment Treaty with the United States, and a BIT is a stepping stone towards a Free Trade Agreement," he stated. A treaty's wording was very important, he said, adding "and, we want it to be right for us, and right for them." "It is very important that you have a good treaty, hence, there is no need to rush."

Asked why was it taking time, Dr Shah said whatever treaty we sign with the United States, similar kind of treaty would be enforced with other partners, say if a special treatment is allowed, it would then be extendable to others, as well. "So, the wording has to be right. We want to sign a treaty in which we can give the same safeguards to everybody. There are certain legal rights, which they want, and we are negotiating the right wording for it," he added.

To a question, Dr Shah said the government had an eye on prices and control of inflation, and more and more employment opportunities were being created.

Responding to a claim by a journalist that prices of essential goods are cheaper in India, he said, "to the contrary, most of the kitchen items in Pakistan are cheaper," in fact, these are on the lower side in the whole of South Asian region.

In this behalf, he referred to a recent study on 15 items, which are part of the basic budget, as well as the petroleum products, diesel and kerosine. "Our prices are cheaper than those in India," he added.

Dr Salman Shah made it clear that, it does not, however, mean that there was no inflation in Pakistan. Inflation was at 11.1 percent in April 2005, which is now on decline. It was initially growing at 15 percent on food items.

Explaining as to why food was cheaper in Pakistan than in India, he said that the reason was that Pakistan imported a lot of wheat, "and we now have huge stocks of wheat" in all the provincial governments, which were not seen in Pakistan's history. "And with the new crop coming in, there is a glut of wheat in Pakistan."

Wheat is the most essential commodity, and inflation in Pakistan is driven by it and as a consequence of huge wheat stocks, the projected inflation would be around 6.5 percent for next year.

Dilating on the policy, he said a year ago, prices of flour started increasing, and it occurred when the crop was under harvest. "As a strategy, we decided to open up its import, and when we looked for imports, we found that there were so many impediments that it was almost impossible to do so. We cleaned it out, and made it clear that whosoever wanted to import it, could do so."

And because of that, a million tonnes of wheat was imported and the godowns of the governments of Sindh and Punjab remained full, but the people did not buy from the government, while the private sector had a lot of stocks.

Further in respect of maintaining a check on prices, he said noticing that cement prices were going up, the government opened its import, and allowed trade subsidy on it. And, there was an instant lowering of per bag cement price from Rs 40 to 50.

"From Rs 375, it was yesterday selling at Rs 310, within three-four days," Economic Adviser to the Finance Ministry, Dr Ashfaq Ahmed Khan, who was present on the occasion, stated.

Difference in sugar and cement, Dr Shah said was that the sugar mills had increased the cost since farmer had enhanced prices of sugarcane.

The farmers benefited Rs 40-50 billion. But in cement, the increase in input was not there, in fact it was the same, while price shoot up to Rs 375 per bag. The only reason for it was that the cement producers were finding it a good opportunity to profit since there was an increase in its demand.

He said the cement price would lower further. In market economy, he stated, you can't allow monopoly. "When we see that a sector is going out of line, we try to balance it with import."

Earlier, the delegation members, along with Pakistani community members as well as invitees from the various US departments, attended a dinner hosted by Ambassador Jehangir Karamat, at Jamshed Marker Hall of the Embassy.

 

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LAHORE (April 22 2006): The national economy has witnessed a significant improvement and the inflation rate has dropped from 5.7 per cent to 4.6 per cent, said Speaker National Assembly Chaudhry Amir Hussain, here on Friday.

While addressing the members of the Management Committee of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) in Lahore, Amir Hussain said there had also been a visible improvement in the country's exports.

FPCCI President Chaudhry Muhammad Saeed, Vice President Azhar Saeed Butt, Women Chamber of Commerce and Industry (WCCI) President Dr Shehla Akram, Honorary Consul General of Indonesia Jamil A Naz and representatives of trade associations also attended the meeting.

The speaker maintained that the country's economy, which was in bad shape in 1990s, was out of woods now because of the well-managed economic policies of the present government. Praising economic vision of Shaukat Aziz, he said he was a clear-minded person and his policies both as Prime Minister and earlier as finance minister played a key role in putting the economy on right track.

Highlighting the government policies, he said it had tried to provide enough incentives to trade and business community with the aim to make the country strong and stable in economic terms. He said he believed that a stronger economy also supplements the defence capabilities of any country.

Shedding light upon women's role in national uplift, the speaker viewed that womenfolk formed half of the country's total population, and therefore there was need to benefit from their capabilities in economic and other fields. No one can deny the mental capabilities of women as now they were joining armed forces and flying fighter aircraft.

About law and order situation, he said the government was taking all-out measures to facilitate the trade and business community and providing them a peaceful environment. Commenting on the concept of enlightened moderation, he said it did not mean westernisation, but "an effort to make Pakistan a forward looking and modern Islamic state."

Later, talking to newsmen the National Assembly Speaker said no proposal of election of businessmen as technocrats in the Lower House was under consideration. However, if such a proposal was ever tabled on the floor, the house would discuss it, he added.

 

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ISLAMABAD (April 22 2006): The Asian Development Bank (ADB) will offer an amount equal to 4 billion dollars, an all time high development assistance to Pakistan in 2006-08. The bank has urged the government to promote good governance with a view to effectively meet the challenge of poverty, unemployment and mobilising the much needed additional resources in the country, Business Week reported.

The ADB is concerned over the poverty and made it its central objective, which has been operationalised by promoting sustainable pro-poor growth. The bank is of the view that bad income distribution could retard the poverty-reducing impact of high growth.

The ADB has expressed willingness to assist the government in improving the country's infrastructure in order to help attract sizeable local and foreign investment.

The bank, which provided 15.8 billion dollars as part of the project assistance during 1968 to 2005, sources said, has agreed to make further investment in sectors like energy, agriculture, transport & communication, social sector, governance, finance & trade and rural development.

The government has been advised to put certain effective measures by drastically improving its public and private sector education. The bank argues about the poor quality of public sector education and ineffectively enforced upon by the public and private institutions. The bank believes that infrastructure constraints could be eased through privatisation, unbundling and competition.

The success of this policy depends on the government's ability to establish strong, independent and suitably equipped sector-specific regulators. This will require significant investments in capacity building. "These regulators will then be responsible for the creation, enforcement, and maintenance of a transparent, predicable and fair regulatory structure," the study added.

 

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LAHORE (April 22 2006): Working group of the Ministry of Industries, Production, and Special Initiatives (IP&SI) formed on 'Made in Gujranwala Vision' in its meeting held on Friday, decided to set up modern industrial estate at Gujranwala at a cost of Rs 1 billion.

Kamran Rasool, Federal Secretary IP&SI presided over the meeting at Small and Medium Enterprise Development Authority (Smeda) head office in Lahore. Almas Hyder, Chairman Tusdec, Sheikh Muhammad Aslam, Zonal Chairman FPCCI, Khawaja Zarrar Kaleem, former President Gujranwala Chamber of Commerce and Industry (GCCI), Khawaja Tahir Hussain, Ali Sheikh, former senior vice president GCCI, Arif Basra from National Industrial Parks Development and Management Authority and Muhammad Najeeb Aslam of the Punjab Revenue Department attended the meeting. Smeda General Managers Syed Iqbal Anwar Kidwai, Jameel Afaqi and Iftikhar Hussain also attended the meeting.

The working group discussed a number of proposals for establishment of a new industrial estate, business centre, Research and Development Cell, Dry Port, and a testing lab under Made in Gujranwala Vision, a long term plan for industrial expansion and development of Gujranwala.

Kamran Rasool advised the working group to purchase 2000 acres of land at some appropriate location between Lahore and Gujranwala for the proposed industrial estate. However, the first phase of this project would be planned on 1000 acres of land which will cost around Rs 1 billion, he said, adding that the requisite funds for this project would be obtained from banks against government guarantee.

 

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ISLAMABAD (April 22 2006): Chief Engineer Gwadar Development Authority Aslam Lehri on Friday said that Gwadar deep seaport would hopefully be operational in June this year. Talking to private TV channel he said the port would hopefully handle its first commercial vessel in June.

Depth of Gwadar would be 14.5 m which would help the port handle large containerships and bulk carriers. Terminal facilities for container, general cargo and bulk cargo handling have already been set up.

At this stage, Gwadar deep seaport would be able to handle bulk carriers up to 30,000 Dead Weight Tonnes (DWT) and container vessels of 25,000 DWT. To a question he said main aim of setting up Gwadar Development Authority was to implement approved master plan in Gwadar.

In the master plan GDA has identified sites for housing schemes, commercial buildings and industrial states, he added. He said besides four main roads seven secondary roads would be constructed in Gwadar.

To another question he said federal government has granted Rs 1,500 million for the development of Gwadar area.

 

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Karachi: Pakistan's biggest listed firm, Oil and Gas Development Co, (OGDCL), on Friday reported a 36 per cent increase in its nine-month net profit due to high oil and gas prices and increased production.

OGDCL earned a net profit of Rs33.2 billion ($553.42 million) for the nine months to March 31, up from Rs24.4 billion in the year-ago period, the company said in a statement to the Karachi Stock Exchange (KSE).

The result was in line with a range of Rs31.8-Rs35.1 billion, forecast by a Reuters survey of eight analysts.

OGDCL, which controls 39 per cent of Pakistan's oil and gas reserves, also announced an interim cash dividend of Rs2.25 per share.

The firm became the largest company on the KSE after listing in January 2004. OGDCL shares were trading 35 paisas down at Rs162.25 at yesterday morning in a broader market which was down 0.51 per cent.

Analysts said higher oil and gas prices and higher production were the primary contributors towards the earnings growth.

"The growth in earnings mainly stemmed from increased oil and gas production coupled with higher global oil prices," said Faraz Farooq, analyst at brokers Jahangir Siddiqui Capital Markets.

OGDCL's oil and gas production during the July-March period is expected to have increased by 5 per cent, he said.

The company did not release production details with the results.

Also, the gas wellhead tariffs of OGDCL went up by almost 26 per cent from January 1, which had a positive impact on the company's earnings.

 

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Saturday, April 22, 2006

LAHORE: The Pakistan Agric-ultural Storage and Services Corporation (PASSCO) is all set to procure 1.3 million tons of wheat under its procurement scheme 2006-07 for the 2005-06 wheat crop.

PASSCO and provincial food departments procure market surplus wheat every year.

The wheat crop for 2005-06 is estimated at more than 20 million tons. The government has determined five million tons wheat as market surplus that would be procured by PASSCO and provincial food departments.

Of the five million tons market surplus, PASSCO will procure 1.3 million tons, the Punjab food department will procure three million tons and the Sindh food department 700,000 tons wheat under the procurement scheme 2006-07, said Abdul Majeed, General Manager Field PASSCO.

He was talking to the Daily Times on Friday.

He said PASSCO has sub-divided the procurement area into 16 zones countrywide to ensure effective control and better services to farmers. We have established more than 250 purchase centres and each centre is affiliated with the nearest bank to make payments to growers well in time.

Mr Majeed said PASSOC had procured 997,000 tons wheat under the wheat procurement scheme 2005-06, out of which some 300,000 tons are still carried over. The Punjab food department is also carrying over 1.35 million tons besides about 300,000 tons are lying with the Sindh food department. He said the food departments of Balochistan and the NWFP have also carry-over stocks of over 100,000 tons.

According to him, excessive import of soft wheat by the private sector has resulted in carry-over stocks in the country.

But the government is committed to procuring a minimum of five million tons of wheat under the wheat procurement scheme 2006-07, he said, adding: “The government would continue procuring further in case more production is on ground.”

Pakistan is self-sufficient in wheat for 2005-06. Farmers, however, have apprehensions that the private sector could exploit the situation.