July 5, 2010

Based on expectations for a bumper crop, Pakistan has the potential to export up to five million tonnes of wheat this year, according to grain traders.

The spike in global food prices during 2007-08 led the country to ban the export of wheat and give incentives to farmers to grow the crop.

"This year we will have an excess of supply and that should once again open the door to exports soon of around five million tonnes this year," Gul Memon, chairman of Mehran, a local commodities trading firm said.

The country's wheat harvest this year is estimated to be around 24 million tonnes, while domestic consumption is around 20 million tonnes, Memon said.

"The government is in the process of deciding how much wheat to export, since low prices of the grain may only come to the benefit of foreign consumers," said Shamsul Khan, a member of the Karachi Chamber of Commerce and Industry.

This year, the prospect of heavy supplies globally has already pushed benchmark Chicago Board of Trade wheat to near a three-year low after sliding 14% so far, although the market has found some support in recent weeks from concerns over the Canadian crop.

The Economic Coordination Committee (ECC) on Tuesday (Jun 29) rejected a proposal to export two million tonnes of wheat due to low global market prices, a committee official said.

"We have decided to form a separate committee to deal and review this wheat exporting issue and one of the options would be to supply mills with subsidised wheat which could be produced into flour and then exported," said the official.