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Govt will need to import 3m tonnes of wheat, warns trade body

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  • PBF Vice Chairman Ahmad Jawad says looming wheat gap within Pakistan may morph into a full-blown crisis soon.
  • Forum urges provincial food depts to monitor wheat purchase by private sector to avoid hoarding.
  • Says govt could have to import a minimum of 3 million tonnes of grain to stabilise the market.

ISLAMABAD: A trade body on Monday warned of a looming wheat crisis in the country , urging the government to ban wheat exports to stabilise the wheat prices and cater to supply gaps.

“Looming wheat gap within the country currently seems prepared to morph into a full-blown crisis over the approaching months,” said Pakistan Businesses Forum (PBF) Vice President Ahmad Jawad.

PBF urged provincial food departments to monitor wheat purchase by the private sector and curb involvement of middlemen to avoid hoarding. The explanations embodied domestic output inadequacy and billowy international costs within the wake Ukraine issue. The flour costs were probably to rise additional if the govt remained unable to manage imports and take action against hoarders, it added.

The explanations embodied domestic output inadequacy and billowy international costs in the wake of the Ukraine issue. The flour costs were probably to rise additional if the govt remained unable to manage imports and take action against hoarders, it added.

“Prime Minister Shehbaz Sharif has been educated that this wheat harvest is probably going to hover around 26.2 million tonnes against the target of 28.9 million tonnes.” 

The forum said the government may have to import a minimum of 3 million tonnes of grain to stabilise the market and meet the demand of 30.8 million tonnes, despite a carryover stock of 1 million ton.

PBF said that the imports could surpass estimates, pushed by wheat smuggling into Afghanistan, adding that market players had decried wheat imports in the extended quantity. 

“One, the cereal is briefly provided globally owing to a poor harvest, secondly, Pakistan doesn’t have enough bucks to get costly imports with the nation’s foreign currency reserves plunging to $10.5 billion on the widening trade and accounting deficits.”

“What will wheat shortages and costly imports mean for the shoppers,” the group questioned. The flour millers have already raised their costs in Punjab by Rs11 per weight unit supported the open market wheat value of Rs2,200 per 40kg when the termination of official releases.

Punjab had been providing wheat to the millers at the subsidised value of Rs1,950 per 40kg, which was additional slashed to Rs1,600 for the first 20 days of Ramadan.

“The flour inadequacy within the market and also the high value of the artifact could increase food insecurity within the country, particularly within the additional backward and poorer districts of the country, unless the govt proactively ensures its convenience at subsidised rates.”

Jawad deplored wheat shortages and increasing imports, and asked for immediate measures to deal with factors such as water shortage, poor farm management practices, global climate change, and carbamide inconvenience, which had bogged down the agriculture sector.

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Bulls Reenter PSX: The KSE-100 Rises More Than 886 Points

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As the market surged more than 800 points in the early morning trade, bulls grabbed control at the Pakistan Stock Exchange.

During the first trading session, the benchmark KSE-100 index increased by 886 points to 61,350.48 points.

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Pakistan’s steel prices are rising; get the latest figures here

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Another increase in steel prices has resulted in higher construction expenses in Pakistan. The economic downturn and continuous shipping delays have resulted in sharp price increases for building supplies, which has an effect on those who are planning to construct homes.

Due to increased manufacturing costs and supply chain interruptions brought on by the Middle East crisis, the price of iron, commonly known as steel rebar, has increased by Rs5,000 per ton. Local and imported steel rebar now costs between Rs240,000 and Rs260,000 per ton as a result of this most recent rise.

The cost of branded iron went from Rs255,000 to Rs260,000 per ton, while the cost of local iron climbed from Rs236,000 to Rs240,000. Furthermore, the cost of scrap or unprocessed iron has increased to Rs160,000 per ton inin the iron and steel markets.

The impact of the skyrocketing steel prices will be exacerbated by any more interruptions in the raw material supply chain. The cost of cement, on the other hand, has somewhat decreased and is at Rs 1,246 per bag.

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Up 30% to Rs 5.1 trillion by mid-February, FBR collected

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The total increase in domestic taxes has been around 40%, whilst import duties and associated levies increased by 16% between July 2023 and January 2024.

With the recovery of the GDP and increased inspection of FBR collection, the growth in revenues accelerated.

Up to mid-February, FBR receipts increased by 30% to Rs. 5.1 trillion. Nevertheless, decreases in import tariffs over time and, more recently, import license limits implemented by the State Bank of Pakistan (SBP) to manage the country’s balance of payments in the aftermath of foreign exchange shortages, were mostly responsible for the decline in the rise of import taxes.

However, the impact of improvements in import valuation, which resulted in collections of Rs 151 billion, as well as the anti-smuggling campaign, which saw a surge of about 69% in the current fiscal year over the previous one, are also included in the income collected from imports.

The statement said that there was room to improve anti-smuggling operations by considering expanding Baluchistan’s customs force, which now only has 378 anti-smuggling employees out of 20,000 total.

The mobilization of domestic tax income, which accounted for more than 64% of all revenues received in the current fiscal year, was hailed in the statement as a welcome change.

In parallel, the percentage of import duties has decreased to 36% from over 50% just three years prior. The main drivers of this increase in revenue were the several taxes sources. From Rs. 1,751 billion to Rs. 2,447 billion, income tax receipts increased significantly—by 40%.

Banks, the petroleum and oil lubricants (POL) business, the textile industry, the electricity sector, the food industry, and a number of service industries were among the major income tax payers. Up to mid-February, FBR receipts increased by 30% to Rs. 5.1 trillion. Notable rise was also seen in sales tax receipts, which increased by 19% from Rs. 1,480 billion to Rs. 1,766 billion.

POL, the electricity sector, the food sector, the automobile sector, the iron and steel sector, and the chemical sector were important growth drivers.

The amount collected in federal excise taxes increased significantly by 61%, from Rs. 190 billion to Rs. 307 billion.

Taxes on tobacco goods, the cement industry, drinks, airlines, fertilizers, and the automobile sector were the main causes of this increase. The amount collected in customs duties increased by 14%, from Rs. 552 billion to Rs. 629 billion.

The POL, automobile, iron and steel, electronics, and food industries were among the main donors to customs duties.

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