March 17, 2006

 

Pakistan's wheat production to drop slightly 2006

 

 

Pakistan's MY2006/07 wheat production is forecast at 21 million tonnes, slightly lower then last year's record production of 21.6 million tonnes, according to a USDA Foreign Agricultural Service report dated Mar 13.

 

However, the dry spell during early in the growing season and rise in temperature during February may lower production slightly below last year. Regardless of these factors, this year's crop will be the second largest crop harvest on record, USDA forecasts. 

 

This is due to increased availability of irrigation water, good management practices and an increased application of fertilisers and herbicides. The 21-million-tonne production forecast represents potential production and assumes no further deterioration in the condition of the crop before the harvest scheduled to begin the later half of March.

 

The 2006/07 crop output forecast of the Ministry of Agriculture (MINFAL) is 22 million tonnes.  

 

Wheat imports are estimated at 0.6 million tonnes, reflecting the government's determination to continue an unrestricted trade policy and a domestic market that attracts wheat at above market rates.

 

Traditionally, Pakistan is a wheat importer, the USDA pointed out.

 

"It is expected that imported wheat arrivals would begin in the fall of 2006 to respond to demands in MY2006/07, especially if there is continuity in the government's liberal domestic sales and wheat import policy," the agency reports. 

 

The government has announced a continuation of the more liberal trade policy set for wheat and its products in the coming years. MY2006/07 import volume is projected to be same as last year.

 

These imports primarily reflect the needs of the Karachi market, where inland wheat is more expensive than imported wheat due to transportation costs. Political pressure to hold prices may increase demand for a government release of subsidised stocks onto the market.

 

This has led most observers to believe that imports will be necessary to avoid a crisis during the second half of MY2006/07, the USDA said.

 

For the full USDA report, click here.