May 4, 2006

Pakistan re-imposes duties on wheat imports

Pakistan has imposed a 10 percent duty on imported wheat to encourage traders to buy domestic wheat, a government minister said Tuesday (May 2).

Sikander Hyat Bosan, Pakistan's minister for food and agriculture, told a news conference that the duty would take effect immediately.

Bosan said that the government would ensure that farmers get a minimum guaranteed price of PKR415 per 40 kilogramme (US$0.17/kg) set by the Pakistan government.

In July 2005, the Pakistan government removed all duties on wheat imports to improve food supplies to check rising domestic prices. Since then, local traders have imported an estimated 850,000 tonnes of wheat.

Bosan said this year, the government has fixed the procurement target at 5 million tonnes, up from 3.94 million tonnes last season. The government's stock currently stands at 2 million tonnes from last year's crop, he added.

Pakistan's government buys part of the country's total wheat output at a state-set price to maintain reserves and offer income stability to farmers.

Last month, Bosan had said that the country's wheat crop may be around 20.5 million tonnes, cut back from the expected 22 million tonnes because of unfavorable weather conditions. 

Local traders have put Pakistan's annually consumption at around 21.5 million tonnes. Some have said that even with a 20.5 million-tonne wheat crop, the 2-million-tonne carry-overstock would ensure that the country has sufficient supplies.