Islamabad (Pakistan), August 7 (ANI): Amid the food and debt crisis in Pakistan, the country is considering refusing Russia's offer to supply 120,000 metric tons of wheat at a price of USD 399.50 to save USD 1.4 million.
According to The Tribune Express, Pakistan demanded Russia to further reduce the rate by 2.4 per cent due to the falling global commodity prices.
However, Russia made the final offer to supply the wheat at Rs 399.50 per metric ton under the government-to-government deal.
As per the food and national security ministry, Pakistan has around 7.7 million metric tons of wheat that are sufficient for 168 days of consumption.
The decision was taken on Friday by the Economic Coordination Committee (ECC) of the Cabinet after consulting with Prime Minister Shehbaz Sharif. It was presided over by Finance Minister Miftah Ismail, The Tribune Express reported.
According to a statement issued by the finance ministry, the committee observed that there was a declining trend in the price of wheat which may further reduce in the coming days.
"The ECC decided that the Russian side may be offered the price of USD 390 and the offer may be cancelled if they (Russians) do not accept the offer," it added.
Some members of the ECC were against the decision to reject the Russian offer because of the relatively thin position of the wheat stocks.
Pakistan has, however, lost the deal as the validity period to accept the offer was Friday 6 pm, Moscow time.
The Pakistan government proposed USD 390 per ton, which is USD 9.5 or 2.4 per cent less than the final offer given by Russia, which in total will save USD 1.4 million of Pakistan at the total offered quantity of 120,000 metric tons.
Pakistan had decided to import three million metric tons of wheat this year to meet its consumption and strategic reserves requirements of which 986,000 metric tons of wheat have already been procured through three different international competitive bidding deals.
The Trading Corporation of Pakistan (TCP) had initiated the process of importing wheat from Russia on a government-to-government basis.
A memorandum of understanding was also signed between the two governments in June this year.
Initially, Russia had offered the wheat price at USD 410 per metric ton, which it subsequently lowered by 2.6 per cent.
The prime minister had formed a committee under Tariq Fatemi, his special assistant without a portfolio, to negotiate with the Russian Embassy on the price of the wheat.
Sources said some of the ECC members strongly encouraged the finance minister not to turn down the Russian offer.
The PML-N-led coalition government has already decided to reduce the wheat strategic reserves requirements from two million tons to one million tons in a meeting held last month. With the reduction in the reserves requirement, the overall wheat import requirement has also been reduced to 1.6 million metric tons.
The country had already signed deals for the import of nearly one million tons.
The decision to reduce the strategic wheat reserve requirements by half was made due to thinning foreign exchange reserves and high global commodity prices.
The ECC was informed on Friday that the International Grants Council, London, had reported the price of Black Sea wheat at the level of USD 354 per metric ton and the prices were on a downward trajectory after a deal between Russia and Ukraine.
However, the ECC was also informed that the wheat prices had increased on Friday by USD 4 on fears of supply disruptions due to increasing tensions between China and Taiwan in the Taiwan Strait. (ANI)