Wheat prices in local markets in Pakistan are expected to drop by Rs. 5-7 per kg, with some experts predicting a reduction of up to Rs. 25 per kg following a private consortium’s agreement to import 0.7 million tons of wheat from Russia and Romania.
The first shipment of 55,000 tons of Russian wheat is set to arrive at Karachi Port on September 15, with subsequent shipments arriving in the coming weeks. The imported wheat is priced between $282 and $295 per ton (cost and freight) for Karachi, with an estimated landed cost of approximately Rs. 100 per kg, which may translate to Rs. 105-106 at the retail level.
Muzzamil Chappal, Chairman of the Cereal Association of Pakistan (CAP), anticipates an immediate reduction of Rs. 5-6 per kg and a more significant drop of Rs. 20-25 after the arrival of Russian wheat. He notes that this import initiative is expected to contribute to lower flour prices and is being undertaken without government subsidies.
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Chappal suggests that the government should consider allowing the Trading Corporation of Pakistan to import between 500,000 to 700,000 tons of wheat to address the current supply-demand gap of 2.45 million tons. He emphasizes the need for formalized wheat imports through a Statutory Regulatory Order (SRO).
Aamir Abdullah, Chairman of the Pakistan Flour Mills Association (PFMA) of Sindh Zone, is also optimistic about a decline in wheat rates, with expectations of a reduction of Rs. 5-7 per kg from the current price range of Rs. 120-123 per kg.
Despite the government’s efforts to import 2.7 million tons of wheat during FY23, consumers have not seen substantial price relief. Several challenges, including wheat smuggling to Afghanistan, delays in wheat release by provincial governments, and millers procuring grain from the open market at elevated rates, have contributed to high wheat and flour prices for consumers.