January 11, 2007

 

Pakistan to abolish wheat export duty

 

 

The Pakistani government plans to abolish a 15 percent duty on wheat exports to help domestic exporters become more competitive in the international market, a senior government official said Wednesday (Jan 10).

 

"The duty is being removed. A formal notification will be issued very shortly, within this week," Ministry of Food and Agriculture Secretary Ismail Qureshi said.

 

The government made an in-principle decision to abolish the export duty following a meeting between agriculture ministry officials and domestic exporters Friday, an industry source said.

 

"Our exports will become more competitive (once the tax is removed.) We want to provide exporters with a level playing field because we aren't providing any subsidy to them," Qureshi said.

 

Pakistan had banned wheat exports more than two years ago and also imposed a 15 percent duty on exports because of poor harvests and rising domestic prices, but last month allowed the export of 500,000 tonnes of wheat after a better harvest this season.

 

Sufficient domestic wheat stocks of around 2 million tonnes and relatively high international prices also encouraged the government to lift the export ban, officials said.

 

Pakistan's wheat output was unchanged on year at 21.7 million tonnes in the recently concluded season, and the government has set a target of 22.5 million tonnes for the 2006/07 crop.

 

Pakistan's wheat crop is sown from November to January and harvested in April and May.

 

The central Punjab province government will release 400,000 tonnes of wheat from its stock for export purposes, while southern Sindh province government and the federal government will each release 50,000 tonnes from their stocks, the industry source said.

 

The quantity will be auctioned through open bidding to private exporters, the source added.

 

Prior to the ban, Africa and the Middle East were the major markets for Pakistan's wheat exports. However, if the government allows wheat exports once again, India could be a new market for the Pakistan-origin wheat, government officials recently said.