September 17, 2012

Pakistan delays decision on allowing public sector to export wheat

Pakistan's decision to allow the public sector to export wheat has been delayed till the compilation of precise assessment of the upcoming crop, despite having surplus stocks.

"Though we are more than comfortable with existing stocks of grain in the country, we tend to choose a sound approach for granting wheat export permission," said a senior official on Friday (Sep 17). As climatic changes lead to widespread losses to the agriculture sector globally, decisions about wheat export are deliberately being delayed.

"In this situation, we will be in a better position to arrive at a definite conclusion in January about the availability of wheat in the country," said the official.

The federal government is even contemplating constraining the volume of wheat export by the private sector, he said. "We are closely monitoring the wheat demand and supply situation in the country," he said. A committee in the Ministry of National Food Security and Research has been functional to minutely monitor the wheat situation in the country, he disclosed.

Punjab has 4.3 million tonnes of stock at present, which is about a million tonnes more than its remaining grain requirement. Pakistan Storage and Services Corporation (Passco) has stocks of 1.6 million tonnes while the Sindh Food Department has more than a million tonnes of wheat. Hence, Pakistan has over two million tonnes of surplus wheat.

However, given the irregular situation of grains in the world market, the federal government does not want to take a risk, the official said. He added that it would be premature to allow wheat export before a final assessment of the upcoming crop of wheat.

Former chairman Pakistan Flour Mills Association and one of the leading exporters of wheat Khaleeque Arshad said the government should not allow large-scale export of wheat. Two million tonnes of surplus wheat was not enough keeping in view global warming.

"We are witnessing a dramatic change in weather pattern," he said. "Since 2010, we are witnessing a mix of drought and floods every year," he said. Floods and rains have played havoc with the agriculture sector, he warned.

Pakistan has exported wheat more often than not since 2000. However, abnormally high prices of local wheat have kept Pakistan out of the international market in the last couple of years despite a huge stockpile of wheat. Lately, an upward trend in the global market is being witnessed, pushing the price of wheat well above US$300 per tonne from US$270 a tonne.