Latest news with #ElectronicWarehouseReceipts
Business Recorder
21-05-2025
- Business
- Business Recorder
PMEX set to launch first-ever deliverable contract in agriculture products
Pakistan Mercantile Exchange (PMEX) - the country's only one electronic platform to trade futures commodities - announced on Wednesday to officially launch its first-ever 'deliverable' contract in agriculture products i.e. sugar over the next two weeks. The exchange will offer buyers and sellers to discover the sweetener price, improve supply chain management, and discourage hoarding and speculations of the commodity in the country. 'PMEX is aimed at formally launching Deliverable Sugar Futures in 10 to 15 days,' PMEX Chief Business Officer (CBO) Zaki Ur Rehman said while talking to Business Recorder. This would be a 30-day deliverable futures contract of 12 metric ton each, he said. The Securities and Exchange Commission of Pakistan (SECP) recently approved the launch of the contract (deliverable sugar futures). The futures exchange (PMEX) considered it as a landmark step towards improving transparency and efficiency in Pakistan's sugar trade. Increase in sugar price: millers, distributors asked to stop overcharging The exchange is onboarding buyers and sellers these days, as there are around 80 sugar mills nationwide. The potential buyers could be anyone including confectionery and soft drink makers in the corporate sector. Rehman said this would was the PMEX's first ever deliverable futures contract in agriculture products. Earlier in 2023, PMEX offered trade in rice and maize along with an option to take delivery of the grain as well. 'However, such trade and delivery option were offered in association with EWR [Electronic Warehouse Receipts] operators in the country like Naymat Collateral Company Management,' he said. A press statement from the PMEX said sugar remained a major product in the agriculture sector. 'Unfortunately, it faced longstanding challenges including unregulated pricing, excessive speculation, hoarding, and supply chain inefficiencies. With the commencement of trading in Deliverable Sugar Futures at PMEX, the industry will gain access to a regulated, national platform that enables transparent price discovery, streamlined trading, effective risk management, and enhanced market documentation,' it read. The presser said, PMEX conducted roadshows in multiple cities including Sargodha and Lahore, the largest sugar trading hubs in Pakistan, bringing together sugar millers, brokers, traders, dealers, and large sugar buyers. $500mn earned through export of surplus sugar, says PM Shehbaz The sessions offered the participants detailed orientation to the new contract specifications, live trading demonstrations, overview of the account opening process and training on how to conduct mock trading on the PMEX before the contract launch, according to the statement. Speaking on the occasion, PMEX CEO Khurram Zafar there was a lack of structure and transparency despite sugar being one of the country's most traded commodities. 'With Sugar Futures, PMEX is turning the tide—ushering in transparency, price stability, and a future where fair trade leads the way,' he said.
Business Recorder
23-04-2025
- Politics
- Business Recorder
NA panel seeks action against counterfeit seed mafia
ISLAMABAD: A parliamentary committee on Wednesday directed the Ministry of National Food Security and Research (MNFS&R) to take strict action not only against companies selling substandard and counterfeit seeds but also against officials responsible for their registration. The directive was issued during a meeting of the National Assembly Standing Committee on National Food Security and Research, chaired by MNA Syed Hussain Tariq. It reviewed a report submitted by MNA Rana Muhammad Hayat Khan, convener of a subcommittee, which detailed irregularities in the sale of fake seeds and delays in wheat procurement and import. A senior MNFS&R official informed the committee that licences of 392 out of 1,200 registered seed companies had been cancelled. To improve transparency, the ministry has introduced a Radio-Frequency Identification (RFID) system to monitor the distribution and sale of seeds. However, members of the committee stressed that accountability should extend to government officials involved in the registration of these companies. They also urged the ministry to ensure equitable distribution of imported seeds across all provinces and to launch public awareness campaigns. It was recommended that seed trials be conducted in controlled environments to assess yields and develop a competitive edge in agriculture. It also resolved to invite the recently established National Seed Development and Regulatory Authority (NSD&R) to the next session to review its progress. The meeting emphasised that legal action must be taken against those selling fake seeds, stating that issuing challans is not enough, and urged the MNFSS&R to engage legal experts to ensure offenders are brought to justice. To protect farmers from exploitation by middlemen, the committee proposed announcing a minimum support price (MSP). Additional recommendations included compensation for affected farmers, stricter penalties of up to 10 years' imprisonment for violators, public distribution of educational pamphlets, and advancements in seed technology—such as heat-resistant varieties and improved sowing techniques. The committee also recommended a complete ban on the import and export of wheat, in light of the country's need. MNFS&R officials briefed the committee on recent initiatives, including Punjab's launch of an Electronic Warehouse Receipts (EWRs) system, which allows farmers to store their crops for up to four months with support from private banks. The government covers 50 percent of the loan mark-up under this scheme. During the session, the National Agricultural Research Centre (NARC) also presented updates on wheat research. While wheat yield per acre has increased from 27 to 33 maunds over the past decade, committee members deemed the progress unsatisfactory. They pointed out that much of the gain was due to favourable weather rather than advancements in policy or research. Committee Chairman Syed Hussain Tariq highlighted that agriculture, once contributing 35 per cent to the national GDP, now accounts for only 20 percent, and expressed concern over declining productivity despite major public investments and technological advancements. The meeting also raised alarms over declining water availability, rapid population growth, and the escalating impact of climate change—all of which pose significant threats to national food security. The performance of the Pakistan Agricultural Research Council (PARC) was called into question, with ineffective seed research cited as a major contributing factor to the declining yields of key crops such as wheat, rice, and cotton. MNAs Rana Muhammad Hayat Khan, Waseem Qadir, Nadeem Abbas, Syed Javed Ali Shah Jillani, Syed Abrar Ali Shah, Syed Ayaz Ali Shah Sheerazi, Zulfiqar Ali Behan, MNA, Usama Hamza, MNA, and Keso Mal Kheal Das and senior official of MNFS&R also attended the meeting. Copyright Business Recorder, 2025
Business Recorder
23-04-2025
- Business
- Business Recorder
E-warehouse receipt financing: does the math work?
Punjab's policymakers have found themselves a shiny new toy: Electronic Warehouse Receipts. On paper, the EWR system is everything a modernizing state dreams of—market-based, tech-enabled, collateral-driven. The logic is compelling: let farmers store their grain in certified warehouses, use the receipts to borrow from banks, and wait to sell until prices recover. All while the government steps aside from procurement and claims it has 'liberalized' the market. But out here in the real world—where timing, liquidity, and working capital decide whether the next crop gets sown or not—the math simply does not work. Let us start with what EWR does not do. It does not give farmers money when they actually need it: immediately after harvest, when the next cropping season begins. This is when farmers are scrambling to buy certified seed, fertilizer, and crop protection. It is also when they are least interested in playing warehouse games or timing the market like commodity traders. Ask any grower in south Punjab or central districts cultivating ten to fifteen acres—often leased in part, credit-financed in full—what is needed in May. The answer is not a warehouse receipt. The answer is liquidity. The average per acre cost of certified inputs for the next season stands at roughly Rs 30,000. Multiply that across ten acres and the result is three hundred thousand rupees in immediate cash need—just to stay in the game. Not to invest, not to expand. Just to plant. But what does the state offer in return? A one-time cash transfer of Rs 27,000—per farmer. Not per acre. Per farmer. Whether one farms two acres or twenty. It is not even a drop in the bucket—it is an insult to the arithmetic. If EWR is meant to replace state procurement as the liquidity engine of the rural economy, it is failing on day one. And that is not because the idea is flawed—it is because it has been dropped into a system that is not ready for it. There are three brutal mismatches here. First, the timing mismatch. EWR relies on storing wheat post-harvest and using it as collateral for loans. But that is too late. Farmers need liquidity before they can afford to wait. EWR helps those with surplus. It does not help those struggling to fund the next cycle. Second, the price mismatch. The government, while preaching market deregulation, is actively offloading yesteryears' grain stock into the market through food departments. That suppresses prices. So even if a farmer warehouses wheat and waits, what exactly is the expectation? A market signal that is being distorted from above? Third, the scale mismatch. Most farmers in Punjab operate on five to twenty acres. That is a scale at which a Rs 27,000 cheque is not even enough to cover urea, let alone pricey hybrid seed or pesticides. Meanwhile, the EWR system is geared toward players who can wait, hedge, and afford to navigate formal credit channels. That is not the median farmer. It is the aggregator, the trader, the commission agent. And here is the kicker: those traders—yes, the same vilified aarthi class policymakers want to cut out—actually have the liquidity and rural networks to make EWR work. Instead of co-opting them as partners, the state has excluded them. And in doing so, it has ensured that the reform is neither inclusive nor effective. This is not market liberalization. This is financial displacement without a safety net. A warehouse receipt is only as good as the trust in the price it can fetch, and the credit it can unlock. In a system where price signals are manipulated and credit markets are illiquid, it becomes little more than a piece of paper. The real tragedy here is not that the idea is bad—it is that it is being wasted. EWR can work. It can modernize trade. It can formalize transactions. But only if the sequencing is right. Only if farmers have the option to hold, not the burden to wait. And only if the state gets out of the business of micromanaging prices while pretending to liberalize them. Punjab's policymakers seem keen to showcase this transition as reform. But a reform that replaces one broken system with another ill-timed, half-baked substitute is not a step forward. It is a stumble in the dark. EWR is not the villain. But the way it is being sold—and worse, implemented—risks turning it into yet another example of reform theater: high on optics, low on impact. And come June, when fields should be green with the next crop, many growers may find their land idle—not because they lack will, but because they lacked working capital. Liquidity cannot be sown with warehouse receipts. It must be financed. And at the moment, nobody is.
