LAHORE: The unabated free fall of rupee against US dollar continues to deprive Pakistanis of the benefit they could have gotten from the declining global wheat prices.
This has emerged from latest wheat bids received on Monday in response to international tender floated by the Trading Corporation of Pakistan (TCP) for import of 200,000 tonnes of grain. Since July 1, 2022 when TCP started receiving offers for wheat imports, rupee weakened by Rs20.47 against US dollar or 11.85 percent.
It means, Pakistanis would have to pay about Rs10 per kilogram more or approximately Rs10,000 additional per tonne of imported wheat on account of weakening rupee from Rs208 against US dollar on July 1, 2022 to over Rs228 on July 25, 2022.
According to bid evaluation report issued by TCP on Monday for import of 200,000 tonnes of wheat, bid submitted by Falconbridge for 110,000 tonnes against quoted price of $407.49/tonne emerged as the lowest, followed by Agrocorp for 120,000 tonnes at $412.92 / 419.92 for 90 days.
Other opening bids included Viterra’s bid for 132,000 tonnes at $413.44 per tonne; Olam’s bid for 110,000 tonnes at $450.00 / $458.00 for 90 days; and Cargill’s offer for 120,000 tonnes at $459.90 per tonne.
The state-owned TCP has yet to take decision about accepting or rejecting these offers. As per previous practices, Economic Coordination Committee of the Cabinet used to give approval of such import deals.
In response to tenders floated for importing wheat, according to a report, Pakistan would be receiving four cargoes of imported wheat in the current month and one shipment already reached at port on July 5, 2011.
As per arrangements, the official further said that Pakistan Agricultural Storage and Services Corporation Ltd (PASSCO), the state-owned enterprise, would store the imported wheat and release it to the provinces according to their demand. Sindh had already demanded 0.2 million tonnes of wheat, while Khyber Pakhtunkhwa and Punjab demanded one million tonnes each.
It should be noted that the ECC, in response to an earlier tender of wheat import, on the request of the Ministry of National Food Security and Research, approved the lowest bid of $404.86 per tonne for 120,000 tonnes of wheat by firm Vittera BV-Marine International with cost and freight bulk at the letter of credit on a sight basis.
TCP was also allowed to match the tender quantity of 300,000 tonnes. This would entail foreign exchange spending of about $121.5 million.
The meeting was informed that Pakistan in May had received the lowest bid price of about $515.5 per tonnes for contracting import of about 500,000 tonnes wheat for delivery between July and August 15, involving a total foreign exchange payment of about $258 million.