July 24, 2012

Pakistan sells 40,000 tonnes wheat to several countries

In the last two weeks, Pakistan has sold about 40,000 tonnes of wheat to buyers in countries including Indonesia, Malaysia and East Africa, traders said on Monday (July 23).

The deals show Pakistan is starting to speed up wheat sales following a slow start to its export season which starts around late May. Prices ranged between US$292 and US$312 a tonne fob, traders said.

The wheat was largely for shipment in containers although there was also unconfirmed market talk a European trading house had booked a 45,000-tonne shipment using a bulk carrier, traders said.

Pakistani export wheat prices rose to US$312 a tonne fob late last week from US$295 previously as international markets rose on concern about the drought in the US Midwest and export demand was strong, traders said.

Export wheat prices had fallen to US$307-308 a tonne fob Pakistani ports on Monday (July 23) for breakbulk (containerised) cargo with pressure coming from cheaper supplies from India, traders said.

"Pakistan's wheat exports have been slow to start this year as internal demand from flour mills is strong," another European trader said. "The latest sales bring the total so far this season from late May to about 115,000 tonnes."

Last year Pakistan sold nearly 1.8 million tonnes between May and June before rising competition from Black Sea region harvests cut shipments.

Traders did not believe that Pakistan had made significant private-sector wheat sales to neighbouring Iran, which has been seeking more grain supplies in the face of western sanctions.

The problem with the Iranian business is the fungal disease karnal bunt present in Pakistani wheat which Iran wishes to prevent spreading to its country, traders said.

The karnal bunt question and disagreement about price continues to hamper progress in talks about an inter-governmental barter deal under which Iran would import one million tonnes of Pakistani wheat.