June 7, 2004

 

 

Pakistani Co May Float Wheat Tender By Month-End

 

The Trading Corporation of Pakistan is expected to float first tender for import of 250,000 to 300,000 tons of wheat by the third week of this month.

 

The corporation is also considering completing the haulage of entire one million tons of wheat before the turn of the year, officials said on Friday.

 

The federal government has assigned the TCP to import one million tons wheat to meet any possible shortfall in future. The imported wheat will be used as a buffer stock to avoid wheat flour crisis as witnessed in the recent past.

 

The officials said the international tender for the import of wheat would not carry any conditions that might oust any source from the race and most of the terms and conditions would be based on world standard.

 

Compilation of world wheat rates and sources along with freight effect is also being taken into consideration. However, sources close to the TCP revealed that five major wheat exporting countries - Australia, the US, Canada, Argentina and Kazakhstan - are being worked upon.

 

At present the corporation is laying the groundwork for the import such as floatation of international tender, fixing of performance bond amount, opening of L/Cs and storage and distribution of imported wheat.

 

The TCP will be importing hard milling wheat also known as hard red winter (HRW) wheat in North America. The contents or properties of the wheat will also be put in tender conditions, which are expected to be C&F Karachi.

 

According to world market rates, at present HRW wheat from the US Gulf is being quoted at around $170 per ton. After adding freight charges between $25 and $30 per ton, the landing cost of wheat would be around $200 per ton, if imported from North America.

 

The sources said that the TCP was expected to fix a minimum bid quantity of around 35,000 tons and haulage quantity at 45,000 tons to meet local ports requirements of draught.

 

The TCP will use both the city ports - Karachi Port and Port Qasim - for unloading the wheat. This decision has been taken to avoid any congestion because wheat is a bulk cargo and occupies a large space.

 

Finance Minister Shaukat Aziz has selected the TCP for handling the imported wheat as the corporation in the past successfully handled different commodities (imports/exports).

 

The sources said that the TCP would hire world's renowned inspection company for carrying out inspection at the port of loading. "This will minimize the possibility of rejection or any default, particularly in term of quality and specification of the wheat."

 

The corporation was also taking the departments concerned into confidence in order to streamline the entire system - from tendering stage up to arrival, storage and distribution.

 

However, wheat importers are of the view that the government should also keep the India option open because import from India will cost less, particularly in term of freight and time advantage. But some traders said that India was presently carrying no surplus wheat for exports.