THE air in the Hafizabad Galla Mandi, usually thick with the happy dust of a bountiful harvest, felt strangely thin. Fewer trucks rumbled through the gateway than expected. The usual cacophony of haggling voices was muted, replaced by pockets of anxious murmuring. In the absence of major players like the Punjab and federal governments, most people like Yusuf expected a glut of wheat in the market. Instead, the piles of golden grains were noticeably smaller, scattered like hesitant guests at a wedding. `Where has the crop gone?` Yusuf, who has come from a neighbouring district to buy wheat for his large family at a fairly lowerrate, asks a commission agent (arhti) in a raspy voice. Shrugging his shoulders, he replies that local investors are to be blamed for sweeping away whatever grain came to the market.

Islamabad used to procure at least one million tonnes of grain from Hafizabad until the 2024 season. But this year it along with all four provincial governments absented itself from the wheat market under a condition of an International Monetary Fund loan.

There was a whisper in the air that the wheat market will crash to Rs1,800 per maund this season against Rs2,900 per maund in 2024 and Rs4,000 in 2023. But to Yusuf`s astonishment the rate was hovering around Rs2,550.

As the final grains are gathered from the fields, a surprising resilience has emerged in the wheat market, confounding earlier anxieties of a price crash.

Instead, the market is experiencing a bullish surge, with per maund rates having already climbed by Rs350.

Analysts predict this upward trajectory will persist as the open market supply diminishes. This contrasts sharply with previous years when the government`s active role in procurement extended the season until the end of May, ensuring a steady market flow. This year, however, central and southern Punjab grain markets were notably bare by the close of April, the typical peak of the harvesting period, with no visible glut of wheat.

Prior to the harvest, the Punjab government pledged to support wheat growers by facilitating private sector procurement. This involved incentivising flour millers with interest-free bank loans, backed by a Rs100 billion mark-up subsidy. In return, the industry was mandated to maintain wheat stocks equivalent to at least 25 per cent of their milling capacity.

Despite these measures, the anticipated large-scale buying by millers has yet to materialse. Instead, commission agents and localinvestors appear to be the primary buyers. Intriguingly, many farmers are reportedly holding onto their produce, anticipating higher prices once the harvesting season concludes. Farhan Shaukat, a farmer owning 10 acres in Sheikhupura, reveals that he, along with numerous other growers, proactively acquired polythene bags in March to store their wheat, foreseeing the price dip in the government`s absence from the market.

Where has the harvested wheat gone? Mansha Warraich, President of the Anjuman Arhtiyan in Hafizabad`s grain market, highlights the significant shift from the pre-2024 scenario. Previously, the government absorbed approximately60pc of the produce offered by the growers after meeting domestic needs, with 20-25pc taken by the flour industry, and the remainder entering the open market.

This season, the government has exited the market, the industry is yet to fully engage, leaving arhtis; and local investors as the dominant players, he explains.

This influx of local investment, he notes, has already pushed grain rates up by Rs350, from Rs2,200 to Rs2,550 per 40kg.

However, Warraich cautions that growers cannot afford to hoard indefinitely and will soon need to sell their surplus wheat to repay loans incurred for farm inputs, essential for securing new credit for the upcoming sowing season.

Adding another layer to the situation, allegations of significant cross-border smuggling are surfacing. Rao Ajmal, a PML-N MNA, claims that at least 1.2 million tonnes of grain have been illicitly transported to Afghanistan, where it fetches a lucrative price of Rs6,800 per 40kg.

The tightrope walk of price stability Chief Minister Maryam Nawaz has touted the current lower wheat prices as a victory, particularly for urban consumers with limited incomes. Ajasim from Gujranwala echoes this sentiment, praising the Punjab government for the availability of grain in the Rs2,300-2,500 per 40kg range this year, a stark contrast to last year`s prices exceeding Rs3,000 and over Rs5,000 by the end of season.

The critical question, however, is the sustainability of these prices beyond the harvesting season. If investors, often perceived as hoarders, are not incentivised to remain active in the market, how will the government ensure price stability in the long run? So far, the government has relied on its existing grain reserves to manage market dynamics. The strategy for maintaining control once these reserves are depleted remains to be seen.

Historical trends indicate a potential for over 20pc price inflation during the winter months as consumption rises and harvest-time stocks dwindle.

Looking towards future harvests Having faced financial setbacks in the past two seasons, many farmers are reconsidering their cropping choices.

The pressing concern is how to encourage the farming community to continue cultivating sufficient wheat to meet national demand. Mian Umair Masood, General Secretary of Pakistan Kissan Ittehad, representing small landholders, points out the stark economic realities.

He estimates the average per acre production cost this year at Rs65,000 (excluding land rent), with yields ranging from 32 to 40 maunds. At a rate of Rs2,000 per maund, a farmer`s maximum earnings would be a meagre Rs15,000 per acre. This return is negligible and deeply discouraging considering the six months of labour, weather uncertainties and market risks involved, he laments.

Amanullah Chattha, Vice-President of Kissan Board Pakistan, recalls the government`s abrupt withdrawal last year citing excessive moisture, leaving growers hesitant to plant wheat this season.

Despite initial encouragement from the chief minister`s promises of incentives, farmers feel abandoned once again. The only incentives announced are a Rs5,000 per acre subsidy for landowners with up to five acres and interest-free loans up to 70pc of the produce`s value (through e-warehouse receipt, EWR) if stored in designated facilities for up to four months, Chattha explains.

He emphasises that the implementation mechanism for this scheme is still unclear, while the wheat crop has already been harvested and either sold or stored by farmers.

Chattha concludes that most farmers will likely grow wheat out of necessity, but a significant shift towards other Rabi crops like sunflower and other oilseeds is anticipated in the next season, signaling a potential challenge for future wheat production.