Pakistan’s wheat market is undergoing a critical transformation. During the 2023–24 procurement season, the government, along with the Pakistan Agricultural Storage and Services Corporation (PASSCO), stepped back from active procurement, opting for a market-led approach. However, this shift occurred without adequate preparation or confidence-building measures for the private sector.

Private traders hesitated to procure wheat due to the government’s carryover stock of 3-4 million tons—enough to unilaterally influence market prices. Although the state claimed to liberalize the market, it continued to exert control, particularly through price caps on wheat flour enforced by Deputy Commissioner (DC) offices.

This duality—market liberalization on paper but intervention in practice—left private actors operating with thin margins and high risk. Farmers, without a guaranteed public buyer, faced severe financial distress as prices dropped below expectations.

In the 2024–25 season, the government again refrained from direct procurement, but the policy landscape became even murkier. The state still controls flour prices via DC offices, distorting the wheat value chain. Farmers receive no price support, while millers and retailers operate under price ceilings that limit profitability and disincentivize investment.

Previously, the government purchased 6–8 million tons of wheat annually—equivalent to Rs. 4 billion at current farm-gate prices (Rs 2300 per maund). Transferring this procurement responsibility to the private sector necessitates reasonable profit margins.

However, with cap prices on flour set between Rs. 2800-2900 per........

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