LAHORE: In a last-ditch effort, the Punjab government has convened a moot on Monday (today) to enhance wheat procurement quotas of aggregators with a view to achieving buying target for 2026-27 season.
It is learnt that banks show reluctance in granting massive financing exposure to relatively new entrants. Consequently, out of 35 aggregators, just 10 are in the race. It is impossible to achieve procurement target of 3.0 million tons with limited purchasers as quotas of available aggregators just cover 1.8 million tons purchases.
A senior official said the provincial government sought commitments from the private parties to procure more than already allotted quotas in order to address the developing scenario. “We have two aggregators committing one million each and one 0.5 million,” he said. He hastened to add that provincial government has bids and Government-to-Government deals in place too.
In order to complete the wheat purchase target, procurement is scheduled to last till 15th June.
Earlier, according to documents available with The News, the federal and Punjab governments agreed to assume full price risk for wheat held by aggregators and ensure guaranteed offtake of leftover stock.
According to minutes of a meeting, Deputy Governor, State Bank of Pakistan, chaired a meeting on April 10, 2026 which was convened to address bank queries raised through the Pakistan Banks’ Association regarding financing to aggregators and wheat procurement mechanism.
DG Food Punjab clarified that the government of Punjab would bridge any shortfall if wheat release prices fall below the agreed benchmark. The aggregator is not exposed to price risk because the offtaker must pay the principal amount before lifting stock. In addition, aggregators will receive an agreed profit margin quoted within a prescribed month-wise ceiling of 10 percent to 16 percent from September to March.
For example, at a 16 percent margin for March, the aggregator will get Rs3,500 per 40kg as principal plus Rs560 as profit.
The federal government representative also confirmed it will compensate aggregators at the agreed price level if market prices fall. The tripartite agreement has been revised to include this arrangement. The deputy governor inquired about release of leftover wheat stock totaling 3.0 MMT — 2.5 MMT by the government of Punjab and 0.5 MMT by the federal government — as per the schedule in the tripartite agreement.
With assured pricing and a streamlined repayment mechanism in place, banks may consider reducing the cash margin requirement to a maximum of 10 percent.
For the 500,000 MT held as strategic reserves, the government may approach the IMF for a sovereign-backed financial guarantee to cover banking exposures.
On the other hand, an aggregator expressed the hope formal wheat buying would start from Bahawalnagar from Monday (today).
Meanwhile, farmers flag policy gaps as wheat harvest peaks. They said Rs3,500 rate is unworkable amid delays. Ebadur Rehman, Director Farmers Association Pakistan (FAP), raised serious concerns over the government’s wheat procurement policy, saying contradictions, delays, and impractical conditions have left the Rs3,500 per 40kg rate largely ineffective on the ground. With harvesting over 50 percent complete in South Punjab and gaining pace in central regions, he said official arrangements remain incomplete even after mid-April.
