December 28, 2006

 

Pakistan allows export of 500,000 tonnes wheat

 

 

The Pakistan government has allowed the export of 500,000 tonnes of wheat after a better harvest of the commodity this season and relatively high international prices, a senior government official said Wednesday (Dec 27).

 

"The government has decided to export half a million tonnes of wheat, keeping in view the country's sufficient stock position," Ismail Qureshi, secretary of the ministry of food and agriculture, told Dow Jones Newswires after a meeting of the Economic Coordination Committee of the Cabinet, or the ECC, which is headed by Prime Minister Shaukat Aziz.

 

He said the country has sufficient wheat stocks of close to 2 million tonnes, and the government decided to allow exports to take advantage of the relatively high international grain prices.

 

"Global wheat stocks are low and we want to take benefit of the situation as this is the right time to export," Qureshi added.

 

Pakistan's wheat output remained at 21.7 million tonnes in the recently concluded season, and the government has set a target of 22.5 million tonnes for the 2006/07 wheat crop.

 

Pakistan's wheat crop is sown from November to January and harvested in April and May.

 

"We are expecting another good crop of 22.5 million tonnes next season, so our stock position will remain comfortable despite exports," he said, adding that the move isn't likely to affect domestic wheat prices.

 

"We will be maintaining strategic reserves of one million tonnes, which is sufficient to keep domestic prices in check," he added.

 

Qureshi said the government could export more than 500,000 tonnes of wheat, but it would depend on domestic and international market conditions.

 

The Pakistan government had banned wheat exports more than two years ago because of poor harvests and rising domestic prices. Africa and the Middle East used to be the main buyers of Pakistan-origin wheat then.

 

However, government officials recently said if the wheat export ban is lifted, then India could be a market for Pakistan-origin wheat.

 

India and Pakistan are already in talks to enter into a barter trade agreement for commodities such as sugar and wheat, but these talks have yet to yield any result.

 

India has embarked on one of its largest-ever wheat import programmes for a single year, and so far in 2006, it has sought 3.5 million tonnes from the international market.

 

It is also the first time in more than six years that India is importing wheat.