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01-11-2022
Bureau Report
ISLAMABAD: The government of Pakistan has approved a deal worth nearly $112m to import 300,000 tonnes of wheat from Russia to meet its domestic shortfall.
The deal endorsed by the Economic Cooperation Committee on Monday comes as Pakistan struggles to balance its fragile economy and manage the aftermath of devastating floods this summer that killed more than 1,700 people and affected some 33 million.
Under the deal, the wheat will be supplied by Prodintorg, a Russian state corporation. Pakistan last imported wheat from Russia in July 2020, in another government-to-government deal for a million tonnes of the commodity.
The Trading Corporation of Pakistan, the government entity mandated for the import and export of commodities, said Prodintorg has not been hit by sanctions imposed by Western countries following Russia’s invasion of Ukraine in late February. Russia and Ukraine are among the world’s largest suppliers of wheat.
Pakistan had set a goal of producing 27 million tonnes of wheat domestically in 2022 but due to a number of reasons, including water scarcity and the redevelopment of agricultural land, scientists were already predicting its harvests would be slashed by 15 percent. The severe flooding of that year wreaked havoc in southern parts of the country and destroyed large areas of farmland in Sindh and Balochistan provinces.
A United States government report on agriculture forecasted that Pakistan’s wheat production would drop by eight million tonnes because of the flooding.
Pakistan’s economic situation remains fragile, despite receiving billions of dollars in funding from global financial institutions in recent months.
A World Bank report in October said inflation in Pakistan was expected to hit about 23 percent in the next fiscal year due to flood-related disruptions and “difficult external conditions, including tighter global monetary conditions”.
Pakistan also had to run the risk of being sanctioned as it was trading with Russia.
Pakistan’s former Prime Minister Imran Khan, who headed to Russia on the day President Vladimir Putin sent his troops into Ukraine, has repeatedly defended his visit and recently said he wanted to import wheat because of his country’s wheat shortfall.
Khan’s successor, Shehbaz Sharif, met Putin in September on the sidelines of the Shanghai Cooperation Organisation in Samarkand, Uzbekistan. He has also accepted an invitation to Russia and has publicly expressed interest in boosting cooperation in areas such as food security, energy and trade.
