Pakistan's Wheat Crisis: Institutional Failures Behind the Market

Pakistan is facing a wheat crisis due to institutional failures rather than supply chain issues. The country imported one million tonnes of wheat in August, three months after its harvest season, which officially produced 29.8 million tonnes. However, the Cereal Association of Pakistan estimates that the actual production was around 26 million tonnes, raising questions about the government's accuracy.

The dispute over production numbers does not resolve the puzzle; it merely relocates it. Even with a lower estimate, domestic production covers the country's needs, making the question of why the state is still importing wheat abroad even more puzzling.

One million tonnes were approved through the Trading Corporation of Pakistan, while Sindh cleared half a million tonnes through the same channel. Punjab wants to import one million tonnes but has not decided whether it should be called an entitlement or an import, demonstrating that the state itself can no longer distinguish between growing wheat and importing it.

The Economic Coordination Committee (ECC) meeting that approved the TCP import also released 1.2 million tonnes of PASSCO's own warehouse stock to the provinces, which is more grain than the fresh import itself. This is not a supply failure but a distribution failure within the state's own warehouses.