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February 1, 2019

Punjab issues tender to export 0.25mln ton wheat

Business

February 1, 2019

LAHORE: The Punjab Food Department on Thursday invited bids to export 0.25 million tons of wheat/wheat products through sea route.

Food Directorate Punjab in a notification floated the tender for the sale of the said quantity of fair to average quality wheat with jute/PP bags in the storage centres of Bahawalpur, D.G. Khan, Multan, Sahiwal, Faisalabad, and Sargodha Divisions.

The export of wheat by Punjab will be part of 0.5 million tons allowed by the federal government late last year. The Pakistan Agricultural Storage and Services Corporation (PASSCO) has already finalised export of 0.1 million tons out of allowed quantity.

It is expected that the government will not have to bear the burden of any export subsidy , because international market is currently bullish, in view of a lower global wheat harvest outlook.

As per terms and conditions of the tender, bids will be received and submitted on February 18, 2019 and will be opened by the Evaluation Committee in the presence of bidders or their representatives on the same day. The bid should be submitted on bid document under single stage single envelope procedure laid down under PPRA 2009/its Rules 2014. The bidder will submit 0.1 percent earnest money of the estimated price which is Rs81,25,000 in favour of Director Food, Punjab, Lahore. Each bidder will have to file bid for a quantity not less than 25,000 tons and not more than 50,000 tons. The successful bidder will be bound to sign an agreement with provincial food department within 7 days of the issuance of acceptance letters by the department.

On December 12, 2018, the federal government issued a notification as a result of decision taken by Economic Coordination Committee (ECC) of the Cabinet for granting approval of 500,000 tons of wheat exports. The ECC discussed the proposal submitted by the Ministry of National Food Security and Research regarding export of surplus wheat/wheat products as requested by provincial governments of the Punjab and Sindh and PASSCO. It was decided that any financial support for freight requested for the purpose will be provided by the respective provincial governments. Federal government will pick up such costs in case of Passco. The latest export permission was the second during the current fiscal year of 2018/19. Earlier, the government had allowed 0.5 million tons of wheat/wheat production exports with a freight subsidy of $150/metric ton through Passco till September 30. Pakistani wheat is in high demand in several Asian countries including Sri Lanka, Bangladesh, the Gulf, and the Far East states due to better quality. The country exported 1.18 million tons of wheat, fetching $236 million during the last fiscal year.

Earlier this year, a tender from Passco attracted more than expected bids to sell 100,000 tons of wheat. The tender, closed on Jan 11, was issued under a government export program to reduce high wheat inventories with possible export subsidies. Some 12 offers were above the minimum price target of $233 a ton which would mean the wheat could be sold and exported without a state subsidy.

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