In a major policy shift, the federal government of Pakistan has decided to step back from the wheat procurement process, following directives from the International Monetary Fund (IMF).

Sources revealed on Wednesday that both the federal and provincial governments will now retain only emergency wheat stocks, totaling 6.2 million metric tonnes for the year.

According to officials, the federal government will hold 1.5 million metric tonnes, Punjab 2.5 million, Sindh 1 million, Khyber Pakhtunkhwa 750,000, and Balochistan 500,000 tonnes. The purchase and storage of wheat for both federal and provincial reserves will now be handled entirely by private companies.

The Ministry of Industries and Production confirmed that the selected company will finance and store the wheat, while the government will pay only service charges. This move is expected to save the government an estimated Rs570 billion annually. For this year, the Ministry of National Food Security has allocated Rs30 billion specifically for service charges.

In another significant change, there will be no subsidy on the wheat support price. Prices will now be aligned with the international market, and the Ministry of National Food Security will determine them based on global benchmarks.

The IMF has explicitly prohibited the federal government from fixing support prices. Previously, the federation had provided bank guarantees for wheat procurement, and PASSCO carried out the purchases. Payment delays to PASSCO had led to circular debt in the food sector, which now stands at Rs270 billion.