Islamabad: Pakistan has received approval from the International Monetary Fund to proceed with its wheat procurement strategy, allowing the government to purchase 6.2 million tonnes of the staple crop to rebuild national reserves. The move comes as part of broader efforts to stabilize the agricultural sector and ensure food security.

Ahmed Umair, Coordinator to the Prime Minister on Agriculture, clarified that the announced price of Rs3,500 per 40kg is an indicative rate, not a fixed support price. He explained that the figure reflects current international market trends and may be adjusted as needed.

The Prime Minister’s Office confirmed that both federal and provincial governments will jointly procure wheat under the new policy for the 2025-26 season. The IMF’s consent marks a shift from its earlier restrictions, which had barred government involvement in commodity markets and led to a sharp decline in wheat prices last year.

Umair emphasized that Pakistan retains the right to define its strategic reserve levels, and the IMF has accepted the methodology used to determine the procurement price. The approval is seen as a positive step toward maintaining the country’s $7 billion loan programme, which had previously highlighted commodity market reforms as a key achievement.

The IMF had initially opposed wheat procurement to reduce market distortions and ease fiscal pressure on provinces. However, recent statements from IMF officials suggest a more flexible approach, recognizing Pakistan’s need to balance reform with food security.

Prime Minister Shehbaz Sharif chaired a high-level meeting with provincial leaders to finalize the wheat policy. While there was consensus on procurement volumes, pricing remained a point of contention. Sindh proposed a rate of Rs4,000 per 40kg, but the federal government opted for a price aligned with global benchmarks to avoid market disruption.

Sindh Agriculture Minister Muhammad Bux Mahar later demanded an even higher support price of Rs4,200, echoing the stance of the Pakistan Peoples Party’s leadership.

Under the new plan, Punjab will procure 2.5 million tonnes, Sindh 1 million, Khyber-Pakhtunkhwa 750,000 and Balochistan 500,000. The federal government will acquire 1.5 million tonnes through licensed private firms, including 500,000 tonnes for special regions. Smaller provinces will also source wheat from Punjab and Sindh.

With the Pakistan Agriculture Storage and Services Corporation now dissolved, private operators will handle procurement and storage, receiving compensation for their services. Only licensed entities will be allowed to participate in the process.

Sindh, however, has opted to manage its entire procurement independently, without involving the private sector.

The estimated storage cost for the full stock over one year stands at Rs125 billion. The government had initially planned to deregulate wheat imports and exports to create a more competitive market, but that decision has now been reversed.

According to IMF review documents, Pakistan had previously committed to ending wheat procurement operations and highlighted the resulting price drop as a benefit to consumers. The IMF had also urged Pakistan to extend reforms to other commodities and strengthen competition laws to support a more agile agricultural sector.

The latest policy shift reflects a balancing act between reform commitments and the practical needs of farmers and consumers, as Pakistan navigates its path toward economic stability.