December 10, 2004

Pakistan May Import Indian Wheat Due to Shortfall

As wheat from India is cheaper than countries like the US, Australia and Russia, Pakistan may import Indian wheat to make up for its shortfall.

"We are expecting a wheat crop of 20 million tons this year and are short of 1.5 million tons. We are presently buying stocks from the US, Australia, Canada and Russia. But our research people have advised us to look at India," said Tariq Sadiq, president of the Islamabad Chamber of Commerce and Industry.

Pakistan has already begun the tendering process and has received one shipment of 150,000 tons from Russia so far. It is expecting another consignment from Australia, he disclosed.

In India at the invitation of the PHD Chamber of Commerce and Industry (PHDCCI), which represents northern states, Sadiq revealed, "We have been told that as against the price of Rs.12.5 per kg internationally, we could get good quality wheat from India at around Rs.9 per kg."

According to Sheikh Muhammad Shabbir, board member of the Federation of Pakistan Chamber of Commerce and Industry and former president of the Islamabad Stock Exchange, Pakistan's domestic consumption of wheat is about 20.5 million tons.

"But last year, production was only 18.7 million tons, hence the shortfall in stocks. Two years back, we had exported around 1.5 million tons, but now the position is such that we have to import around 1.5 million tons to bridge the gap till next harvest," said Shabbir, CEO of Rawalpindi Flour and General Mills.

Shabbir said orders for around 600,000 tons of wheat had already been placed, of which 150,000 tons had arrived from Russia.

While being keen on Indian wheat, traders from Pakistan are apprehensive about the presence of Karnal Bunt, a fungal infection present in wheat grown in several parts of the globe. The restrictions placed on the movement of some goods across the land border through Punjab are also intimidating.