Senate committee proposes setting up strategic reserves for market stabilization

KARACHI:Senate Standing Committee on Commerce, on Wednesday, proposed to establish strategic reserves of essential commodities including wheat and sugar to strike a balance in demand and supply and control their prices for stabilizing the local market.

There should be a high-level integrated forum with a legal mandate to make expeditious decisions regarding the import or export of essential commodities at the right time so that appropriate prices and availability of items of daily use could be ensured to the general public, the committee suggested.

The meeting of the upper house committee held here at Trading Corporation of Pakistan (TCP), was presided over by the chairman of the standing committee Senator Zeeshan Khanzada.

Senator Salim Mandviwala attended the meeting while Senator Fida Muhammad participated online.

The Committee Chairman Senator Zeeshan Khanzada observed that Pakistan’s economic stability heavily depended on a significant increase in exports. Though different ministries and organizations were working to achieve the objectives, the need for a forum persists that could make well-informed and integrated decisions about import or export.

The decisions for importing wheat, sugar or other required commodities to stabilize the local market were taken at the level of cabinet and Economic Coordination Council following a lengthy process that allowed the situation to further deteriorate while political considerations also affected the decisions, he noted.

Terming the former government’s decision to allow the private sector to export the carry-over stocks of sugar as flawed, Senator Zeeshan Khanzada said that the standing committee was of the opinion that such decisions should not be taken at the cabinet level.

The relevant government organizations should be empowered to decide about the import or export of essential commodities on the basis of demand and supply situation, global market sentiments, future requirements, potential production and availability of stocks in the country, the committee members maintained adding that wheat, sugar and other such commodities were included in basic necessities and it was essential to keep their prices under control for providing relief to masses.

Senator Fida Muhammad urged on the need to formulate comprehensive strategies which lead to economic stability of the country and relief to people.

He also stressed on protection of the interests of local growers and an effective check and balance mechanism for ensuring the quality of imported wheat.

Senator Salim Mandviwala stressed on significance of timely decisions in smooth and profitable commodity trading and suggested empowering TCP to make decisions about the import of any commodity at the right time and at the lowest price.

There must be a permanent mechanism tasked with carrying out an assessment of the potential production, current demand and future requirements of essential commodities and taking timely measures for market stabilization, he said.

The committee also sought a detailed report on the prevailing mechanism for maintaining quality standards of imported wheat and sugar at all the stages and role of different relevant organizations in this regard.

Earlier, Chairman TCP Rafeo Bashir, Additional Secretary Ministry of Commerce Ahsan Ali Mangi and other officers briefed the committee about functions, financial matters and revenue generation of TCP and import of sugar, wheat and Urea fertilizer.

They informed that all the imports by TCP were made on directives of the government after approval of the federal cabinet. They informed that the Ministry of Food Security and Research and the Ministry of Industries collect data on the production of wheat, sugar and urea and recommend the import or export of those commodities in the required quantity.

Chairman TCP informed that the total income of TCP surged to Rs.8,043.78 million in FY2022-23 while profit after tax remained at Rs.4,225.3 million. TCP imported 2.6 million metric tons of wheat in the year 2022-23 while no import of sugar was made in the year, he informed adding that 2.2 mmt wheat and 304,409 metric tons of sugar had been imported in 2021-22. Furthermore, around 400,000 metric tons of Urea was also imported in the year 2022, he further added.