pakistan: Pakistan’s PM says no to private imports of wheat to save forex reserves

Pakistan’s Prime Minister Shehbaz Sharif said on Thursday the country has sufficient stocks of wheat and he will not allow its private import to save “precious foreign exchange”, according to a statement from his office.

The country is reeling from the impact of severe floods last month which killed 1,700 and submerged huge swathes of the country, damaging farmlands, infrastructure and inflicting over $30 billion in damage to the economy.

Sharif’s statement came a day after European traders said a government agency in Pakistan had issued a new international tender to purchase and import 500,000 tonnes of wheat.

“Federal government will import wheat at cheap prices and will ensure its provision to the provinces,” the PM’s office said. Sharif was speaking in Islamabad at a meeting of the National Flood Response Coordination Centre.

Economists say Pakistan will have to explore all options to raise and save on its foreign exchange reserves, which have fallen to around one month of imports that consist largely of oil and gas purchases.

The floods, caused by abnormal monsoon rains and glacial melt, have further weakened Pakistan’s economy, already in turmoil with a rising current account deficit, inflation above 20% and a sharp depreciation of the rupee currency.

Pakistan’s new finance minister, Ishaq Dar, told Reuters last week that he will seek rescheduling of some $27 billion worth of non-Paris Club debt largely owed to China, and also ruled out the possibility of a default on the country’s debt.