Pakistan shifts wheat strategy: 6.2mn tons reserved, private company to buy strategic stocks

In a significant development, the federal government has decided to maintain only 6.2 million metric tons of wheat for emergencies, transferring the responsibility of purchasing strategic stocks to a private company. The decision comes as part of conditions set by the International Monetary Fund (IMF), which emphasises market-driven pricing and reduced government intervention in key sectors.

Under the new framework, emergency wheat stocks will be distributed nationwide in accordance with the strategy.

Federal government (1.5 million tons), Punjab (2.5 million tons), Sindh (1 million tons), Khyber Pakhtunkhwa (0.75 million tons) and Balochistan (0.5 million tons).

Instead of directly procuring wheat, the government will now pay a service fee to the private company handling strategic stock purchases, storage, and financing. The ministry of Food Security has allocated PKR 30 billion for these service charges, a move expected to save around PKR 57 billion annually.

The shift also means that the government will no longer subsidise wheat prices. Instead, prices will be determined based on international market benchmarks, marking a significant move toward fully market-driven wheat pricing in Pakistan.

Previously, wheat procurement was handled by PASCO with bank guarantees from the federal government. Delayed payments in that system had contributed to a circular debt of PKR 270 billion in the food sector, prompting the IMF to insist on this policy overhaul.

Officials say this new approach will allow the government to focus on emergency reserves while leveraging private sector efficiency for strategic stock management. Analysts note that while this aligns Pakistan’s wheat policy with international standards, careful monitoring will be essential to prevent price volatility and ensure food security.

This marks a major departure from decades of government-led wheat procurement, signalling a new era of private sector involvement and market-based pricing in Pakistan’s grain sector.