ECC allows 1.2 million tons of wheat export in 2015

KARACHI: The government on Friday allowed the export of 1.2 million tons of wheat this year as the country expects to harvest a bumper crop, grain traders said.
They added that the country, this year, has an excess of supply and that has once again opened the door to exports. The government has also granted $55/ton rebate on wheat export from the Punjab and $45/ton on wheat export from Sindh.
The country’s wheat harvest this year is estimated to be around 26 million tons, while domestic consumption is almost equal to the production. Last year Pakistan produced 25.29 million tons of wheat.
The economic coordination committee (ECC) of the cabinet allowed Punjab to export 800,000 tons while Sindh has been allocated an export quota of 400,000 tons of wheat. It also banned wheat import in the country.
Mahmood Molvi, a Karachi-based trader said the Pakistan may not ship the allocated quantity of 1.2 million tons, as the prices of local grains are much higher than the prevailing world prices.
“Exporters would book the export cargoes at an average price of $290/ton, which is at the higher side despite the rebate of $45-55/ton,” Molvi said. “Transportation of 800,000 tons from Punjab to seaports in Karachi would be another big challenge, and may become a hurdle in exporting all the allocated volume.”
Countries that may book cargoes from Pakistan include South Africa, Sudan, Saudi Arabia and other GCC (Gulf Cooperation Council) countries. “UAE might not import Pakistan’s wheat as it has built its stocks from Ukrainian wheat,” said Molvi.
He said the country is likely to end up exporting a maximum of 500,000 tons this season. The government has allowed exports of surplus wheat ahead of the new crop harvest, which is to start from March-end.
Import of over 700,000 tons in recent months has piled up stocks in the country. Traders imported wheat on reports of a low harvest this season. Moreover, the imported wheat was Rs2/kg cheaper than the local grains.
Meanwhile, the country has resumed wheat’s export with a small quantity of 152 tons in December 2014. Traders said the exports are likely to increase following the ECC’s approval of rebate on exports.
Pakistan Bureau of Statistics reported export of 152 tons wheat worth $40,000 (or $328.94/ton) in December 2014. The export was resumed after some six-month gap. The destination of the export remained unknown, but market sources said cargoes were booked for Sri Lanka.
Meanwhile, the ECC also approved the provision of 30,000 tons of wheat to the United Nations World Food Programme for distribution among internally displaced persons of FATA and Khyber Pakhtunkhwa catering for the period up to March 2015.