Passco paying high financing cost of surplus wheat stocks

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STAFF REPORT IBD: The Pakistan Agricultural Storage and Services Corporation Limited (Passco) is reportedly paying Rs 13.4 million per day as financing cost on surplus wheat stocks procured at an inflated price as compared to international prices, sources said.
Passco argues that early disposal of one million tons of surplus wheat will not only forestall deterioration in the quality of stocks but burden of Rs 4,889.18 per ton on account of storage/financial cost for next year would be eliminated which comes to approximately Rs 4.889 billion for storage of one million ton surplus wheat which implies a cost of Rs 13.395 million per day.
Statistics show that worldwide wheat stocks would be at an all-time high level during 2012 and there is unlikely to be a chance for a rise in wheat price in the international market.
Reasonably high wheat crop in Pakistan, coupled with an all-time high worldwide wheat stocks would make it difficult to dispose of stocks at an appreciable price at a delayed stage.
The Economic Co-ordination Committee (ECC) of the Cabinet has recently ordered a probe against PASSCO for inflicting Rs 2.75 billion loss to national exchequer by delaying offloading of wheat stocks of 2010 crop.


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