Flour export can fetch Pakistan $1bln annually

KARACHI: Flour can be a fast growing foreign exchange earner if the government makes small changes in the regulations, which can help earn about $1 billion per annum through exports of the commodity.

A leading industrialist associated with the flour business said a clear policy on wheat was needed. The export of flour has not been allowed through the Weboc system, he said.

Pakistan Flour Mills Association Southern Region in a letter to Razak Dawood, adviser to prime minister on commerce and industry, said with the recent devaluation of rupee, there were opportunities for wheat flour export.

“It will fetch higher price than raw wheat export and will revitalise idle spinning, creating job opportunities,” the letter said. Despite no restrictions on wheat flour export in small quantities it was only allowed on manual bill of entry.

Only the winners of government tender were allowed to export through the Weboc. As a result exporters and millers were reluctant to undertake large quantity and time bound export contracts.

The letter further said if this hurdle was removed, a sustained wheat export business could be built, as Pakistan has excess wheat and idle milling capacity, both.

According to the recent data collected from the Pakistan Bureau of Statistics during July to November of 2018, around 457,000 metric tons of wheat was exported amounting to $96 million. It fetched approximately $210/ton on an average, while earning from export of flour could be $120 million to $130 million.

An economic expert said Turkey has been earning around $1.1 billion through the export of flour. He said the wheat output in Turkey has been around 21 million tons per annum with consumption of around 19 million tons currently, with some balance from previous year’s stocks. This allowed Turkey to export around $1.1 billion of flour per annum.

Additionally, they have given a target to increase flour exports to $1.5 billion. “In Pakistan, output reaches 23 million tons to 25 million tons. If the production of wheat is around 23 million tons and our consumption varies between 19 and 21 million tons per annum, the country has stock of 2 to 3 million tons,” the expert said.

The left over stocks either gets wastage or destroyed as the wheat has been lying under the sun in different areas. If the government allowed exports, the national exchequer could earn a minimal amount.