Govt Considering Import-Cum-Export of Wheat Products: A Strategic Shift in Policy?
Government Considers Wheat Products Import-Export: A Strategic Policy Shift? In a surprising yet strategic move, Pakistan’s federal government is reportedly considering allowing the import and export of wheat and wheat-based products. This announcement comes amid rising global commodity concerns, surplus local production, and economic reform pressures from international lenders such as the IMF. But what does this dual-policy approach mean for the country’s agricultural economy, food security, and farmers?
Let’s dive deeper.
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Background: A Year of Surplus
For the 2023–24 season, Pakistan witnessed a bumper wheat crop. According to official statistics, wheat production reached 31.4 million metric tons, marking an 11.6% increase from the previous year. This resulted in total reserves of approximately 36 million tons, significantly more than the 32 million tons that are anticipated to be consumed by the nation. In simple terms, Pakistan has more wheat than it currently needs.
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From a ban to a balance: the policy twist Until recently, the government had imposed a ban on both the import and export of wheat products. This was primarily done to stop speculative pricing and stabilize local markets. However, in early 2024, the policy shifted when the government temporarily allowed wheat imports and flour exports to respond to domestic and regional demands.
Now, with strategic reserves in hand and price fluctuations in check, the government is re-evaluating its stance—possibly introducing a flexible import-cum-export framework that will allow trade based on supply-demand dynamics and international opportunities.
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The IMF Factor: Deregulation Ahead
Pakistan’s agreement with the International Monetary Fund includes a key clause: deregulation of agricultural markets by FY2025–26. Under this roadmap, the government would no longer set support prices or directly purchase wheat from farmers. Instead, market forces will drive pricing and distribution, with a proposed federal body overseeing strategic grain reserves only.
This shift raises questions about how future trade decisions will impact local farmers and food affordability.
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The Farmers' Dilemma
Already, many farmers are feeling the heat. Despite surplus production, many report selling wheat at prices below the government’s support price, due to limited procurement and storage capacity. Groups like the Pakistan Business Forum have urged the government to intervene and protect farmers from market volatility, especially before phasing out subsidies and price controls.
Farmers may lose income and confidence if wheat exports resume without adequate domestic support mechanisms. ---
Why Consider Simultaneous Import and Export?
At first glance, the idea of both importing and exporting wheat may seem contradictory. However, there are some circumstances in which this strategy may make sense: Potential Benefits:
Earnings in foreign exchange from exporting surplus wheat or products with added value Access to quality grain varieties for industrial or seed purposes through imports.
Buffer against price shocks, enabling the government to stabilize local markets by using imports when needed.
Potential Risks:
Mismanagement may lead to local shortages, especially if exports exceed planning.
Lower domestic prices could harm farmers, particularly smallholders.
Dependence on imports could grow if production declines in coming years.
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Strategic Recommendations
To ensure this policy benefits the economy without harming vulnerable groups:
1. Establish a transparent export quota system to avoid local market disruptions.
2. Invest in warehousing and supply chain infrastructure to handle surplus efficiently.
3. Subsidize inputs for farmers, especially during transition years.
4. Create a farmer price guarantee mechanism—even if support prices are phased out.
5. Closely monitor international wheat trends to time exports and imports wisely.
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Conclusion
The government's consideration of an import-cum-export policy for wheat and its products marks a major strategic pivot in agricultural governance. It reflects both economic necessity and global trade pragmatism. However, success will depend on careful execution, transparent regulation, and a strong safety net for domestic producers.
This policy has the potential to improve food security and open up new export markets, but if it is mishandled, it runs the risk of causing instability in one of Pakistan's most important sectors.
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