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Thursday March 28, 2024

Govt extends wheat export deadline

KARACHI: The federal government extended, for the second time, the date for export of subsidised wheat to July 31, 2015 after exporters failed to sell the “surplus” grain in the overseas markets amid tough pricing competition. "In terms of Ministry of National Food Security and Research's Office Memorandum... the Federal

By Salman Siddiqui
July 02, 2015
KARACHI: The federal government extended, for the second time, the date for export of subsidised wheat to July 31, 2015 after exporters failed to sell the “surplus” grain in the overseas markets amid tough pricing competition.
"In terms of Ministry of National Food Security and Research's Office Memorandum... the Federal Government has allowed extension of export of wheat till July 31, 2015 for Provinces of Sindh and Punjab," said a circular issued by the State Bank of Pakistan on Wednesday.
Economic Coordination Committee (ECC) of the Cabinet allowed export of 1.2 million tons in January 2015. The federal and provincial governments are giving a sum of $90/ton subsidy on export to compete in the world markets. Despite this, exports remained sluggish due to the depressed prices in the international markets.
Pakistan Bureau of Statistics (PBS) reported the country exported only 10,249 tons till May 31, 2015. On an average, they exported the grain at $294.37/ton in the last five months, whereas in the last two months of April and May, they received an average price of $250-255/ton.
Seatrade Group Chief Executive Officer Najib Balagamwala said, "Pakistan's wheat export is not feasible now {due to tough pricing competition in the world markets}."
The prime quality wheat of Australia is available at $200-225/ton (FoB) against "our" subsidised price of $255/ton. Even Indian wheat, which is very much similar to the Pakistani variety, is available at a cheaper rate, he said. Sri Lanka was one of the feasible markets for Pakistani wheat till Colombo was not collecting levy on import. India has taken over this market from Pakistan due to the pricing advantage, Balagamwala said.
For now, Afghanistan is the only one feasible market for Pakistani wheat these days, but export to the country may not be huge, he added.
Some of the traders, however, were surprised to note that the government has extended the date for export, as they found the recently harvested winter crop (wheat) was lower than the local demand. "The government will import wheat in February, as the production in Rabi 2015 {October 2014 to March 2015} has been insufficient to meet local demand," Balagamwala said.
"Wheat production would remain below 25 million tons," he estimated. In total, Pakistan needs 26 million tons annually to feed and to grow the crop in the next season.
Earlier, Sikandar Hayat Bosan, Federal Minister for National Food Security and Research, said the country is estimated to produce 25.03 million tons of wheat against the set target of 26.3 million tons. The March-April rains, fog and thunderstorm in Punjab are being held responsible for the decline in the estimated production of the grain during the last season.
It would be worth mentioning here that the governments have allowed export of wheat keeping in view the surplus stock from the previous grain season – Rabi 2014. In that season, the country had produced 25.29 million tons. In addition to this, traders in the private sector had imported around 700,000 tons of low quality and low cost grain. According to sources, Pakistan has a carryover stock of around five million tons from Rabi 2014 season.