January 17, 2005

 

 

Canada To Supply Pakistan 0.15m Tons Of Wheat

 

The Trading Corporation of Pakistan (TCP) has signed a deal with Canada to purchase another 150,000 tons wheat completing demand of 400,000 tons wheat import tender issued last month.

 

A top official at the state-run grain trading agency said the TCP issued the tender to buy 400,000 tons wheat last month and struck deals first with Australia for 250,000 tons and then with Canadian exporters for 150,000 tons.

 

"Both contracts have been awarded at the same prices," said Syed Masood Alam Rizvi, chairman TCP. "First we finalised the deal with Australia at $204.50 per ton and the second one was contracted with Canada at the same price."

 

He said the tender was issued for February arrival following the federal government decision to import half a million tons wheat to meet consumption demand.

 

The fresh move of the TCP to import 400,000 tons wheat was part of the government plan to import half a million of commodity it announced last month.

 

The country has already imported one million tons wheat during last six months to meet local demand but shortfall in demand and supply pushed the authorities for import of another half a million tons of the basic commodity.

 

The TCP chief said the Canadian Wheat Board submitted an offer price of $206.75 per ton against the issued tender of 400,000 tons wheat but later it was finalised at $204.50 per tons.

 

"The Australian offered to sell 400,000 tons wheat at $204.50 per ton while Canada offered 200,000 tons at $206.75 per ton," said Mr Rizvi. "But conclusively we managed to strike deals at favourable conditions and process has been completed."

 

The government move to import wheat has succeeded to cap the rising prices of wheat and flour in the retail market to some extent, what the traders say would go further down by the arrival of fresh consignments.

 

An 80-kilogram bag, which was available at Rs 1,080 a two weeks ago, has now come down to Rs 1,020, resulting in a decline of Rs 1 per kilogram at the retail level.

 

Cotton exports: Apart from wheat buying operations, the TCP chief said the corporation is waiting for new directives from the government regarding export of cotton bales.

 

He said the Economic Coordination Committee would decide next week whether the export of cash crop should remain continue or it should be offered to local millers.

 

"By that time we would not float any new tender," he added. "But we would continue buying of cotton from the ginning factories to ensure fair return to growers."

 

The TCP is involved in heavy buying of cotton from local market at Rs 2,159 per maund for over two months and so far made deals for over two million bales.

 

But the government's plan to export bales shocked spinners and textile industrialists who strongly oppose the strategy. They said bales export on lower rates, is just like providing cheaper raw materials to their competitors.

 

The TCP, which floated two tenders for cotton export, now hints that it may sell cotton to local millers but awaits government nod for further action.

 

"For first tender we received highest bid of 41.77 cents per pound while the second one ended at 40.15 cents per pound," said the TCP chief. "We may sell cotton to local mills if they offer good prices but it depends on government policies."