180,000 tons of wheat approved for purchase from Russia

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The Federal government on Friday approved the purchase of 180,000 tons of wheat from the Russian government at a price of $279 per ton.

The Economic Coordination Committee (ECC) of the cabinet approved the import price of $279 per ton for supply on a government-to-government basis hardly a week after the Trading Corporation of Pakistan (TCP) cancelled a tender due to the high bid of $274 per ton and the suspicion of collusion.

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“The import of 180,000 million tonnes of wheat will be made from Russia on a government to government basis, waiving off all taxes, duties”, the finance ministry said on Friday.

Read More: Who is responsible for increase in wheat and flour prices?

Wheat imports by Pakistan

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So far 400,000 tons of wheat has arrived in Pakistan. The government is encouraging imports from private to public sectors to meet the shortfall in the country, said the ministry of food security on Thursday.

Eighteen vessels with quantity 1.1 million tons wheat have been booked by private importers to arrive in Pakistan between September to January. Import permits to 573 private importers have been issued by the Food Ministry’s department of plant protection for the import of 2.9 million metric tons of wheat.

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The government is working on three ways to meet an estimated 2.2 million tons of shortfall this year. Private sector, TCP and government-to-government deals are encouraged. Private sector was allowed to import wheat for an unlimited period.

Regulatory duty of 60 percent, customs duty of 11 percent, sales tax of 17 percent and withholding tax of six percent were abolished on the import. Imported wheat has also been exempted from the Anti-Hoarding Act imposed by the provincial governments on producing verified import records by the importers.

Read More: Is government planning to launch a crackdown on wheat mafia?

Agreement with Russia 

Russia selected state-owned firms United Grain Company and Prodintorg for making arrangements. The government selected Pakistan Agricultural Storage and Services Corporation (Passco) and both the sides started negotiation and finalised it in the light of exchanged wheat specification and other items.

The ministry of foreign affairs received a proposed memorandum of understanding that was also submitted to the cabinet for approval by the end of September.

The Ministry of Agriculture of Russia informed that they were ready to provide 180,000 (plus-minus 10 percent) of milling wheat from October 15 to November 30. But they further informed that this proposal stands valid till 02-10-2020 at 18:00 hours Pakistan Standard Time.

Flour and bread prices have shot up in recent months as flour disappeared from shops and wholesale markets. People have queued outside flour mills in some parts of the country. With these import agreements, the government attempts to covering the staple shortfall.

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