Pakistan's Economic Coordination Committee (ECC) recently approved the sale of 500,000 tons of wheat reserves held by the state-owned Pakistan Agricultural Storage & Services Corporation (PASSCO) at a revised, lower reserve price. This move aims to address the pressure from continuously rising storage and financing costs and to effectively manage the country's surplus grain stock. As previous auctions failed to attract sufficient bidders, the government decided to revise the base price to facilitate the transaction.

According to the newly approved plan, the wheat sale will be conducted through a First-In-First-Out (FIFO) bidding process. The revised reserve price is more attractive to the market: locally procured wheat will have a starting price of 4,150 rupees (approximately $14.85) per 40 kg, while imported wheat will have a starting price of 3,800 rupees (approximately $13.60) per 40 kg. Previously, the government attempted to sell this stock at higher price levels but was unsuccessful due to low buyer participation.

From an international market perspective, Pakistan, as a major wheat consumer in Asia, is expected to reduce its import demand in the coming months due to this large-scale release of wheat reserves. This change could intensify competition for major global exporting regions, particularly putting pressure on wheat suppliers from the Black Sea region, the European Union, and Australia in the current environment of ample global supply. In the domestic market, this measure is expected to impact the trend of flour prices and may improve the liquidity of flour mills and related traders. If the bidding process is competitive, the government can not only alleviate fiscal pressure but also partially reduce the long-term burden of maintaining large-scale public food reserves.