January 17, 2011

Pakistan acquires first wheat export deal after three years

Around 200,000 tonnes of Pakistani wheat have been signed to be sold to private dealers after a three-year ban was lifted on exports in the country last month to be part of the worldwide squeeze in supplies.

"Pakistani wheat is now competitive, they are actively selling cargoes for the last one week or 10 days," said one Singapore-based grains trader.

Another Singapore dealer said the bulk of wheat from Pakistan was for supplies to Bangladesh and Myanmar. "It has 11-11.5% protein content, perfect for Bangladesh and Myanmar markets," he said.

The benchmark US wheat prices jumped 47% in 2010 after Russia banned exports following a devastating drought in summer last year. In recent months, excessive rains and floods across eastern Australia damaged grains, raising supply concerns.

Pakistan decided last month to allow the private sector to export wheat, lifting a three-year ban after a bumper crop led to a market surplus.

Pakistan, Asia's third-largest wheat producer, in August deferred earlier plans to export 2 million tonnes of surplus wheat after summer floods washed away at least 725,000 tonnes of the grain.

Traders said that despite damages from summer floods, Pakistan still has a surplus for export after a bumper crop of 23.86 million tonnes in 2009/10 added to a carryover of 4.2 million tonnes from the previous crop.

India to ban exports of wheat products: India may ban wheat product exports in a series of measures to tame spiralling food prices that have fuelled rapid inflation and increased pressure on an embattled ruling Congress party.

India currently allows up to 650,000 tonnes of wheat product exports until March 31.

Prime Minister Manmohan Singh is expected to announce measures including banning the export of wheat products and removing essential commodities from the futures market after a cabinet meeting on Thursday (Jan 13), the Press Trust of India reported without naming its sources.

Traders say banning exports of wheat products would not help tame food inflation, as the country has huge wheat stocks. On January 1, India's wheat stocks were at 21.5 million tonnes against a target of 8.2 million tonnes.

"Not much is happening on the wheat product export front as inconsistency in its export policy hold us from entering into long-term export contracts," said Veena Sharma, secretary of the Roller Flour Millers Federation of India.