May 24, 2007
Pakistan wheat export ban jeopardises sales to India
Pakistan's decision Monday (May 21) to suspend exports of wheat may put in doubt shipments of at least 50,000 tonnes to Indian flour mills, cause the cancellation of pending contracts and boost prices in India, industry officials said.
Indian flour mills in western and southern provinces, for the first time in several years, started to import wheat from Pakistan last month, to augment local supplies and over 40,000 tonnes are estimated to have already reached Indian ports.
The Pakistani government has suspended wheat exports with immediate effect to check a jump in local prices over the last two weeks.
"Our company bought around 100 containers of wheat from Pakistan but only 50 percent have arrived so far," said S. Pramod Kumar, Executive Director, Belgaum Roller Flour Mills, in the southern province of Karnataka.
Another flour miller, based in south India, said, of the 40 containers of wheat his company purchased from Pakistan, only around 15 have so far been loaded for shipment.
Each container carries between 20 tonnes and 24 tonnes wheat.
Kumar said there is an uncertainty whether the government in Pakistan will allow traders to execute contracts that had already been finalised before the order suspending exports was issued.
Pakistan has suspended exports at a time when India's State Trading Corp (STC) is evaluating bids for import of up to 1 million tonnes wheat of any origin.
Most bidders have offered option origin wheat, including that from Pakistan.
Millers in India say the halt in wheat exports by Pakistan may be a temporary phenomenon and the country may resume sales once local prices show a decline.
"Pakistan has a surplus, they don't have much of a choice, they have to export," said G. Ravindran, Joint Managing Director, Century Flour Mills in southern province of Tamil Nadu.
He said a little less than 50,000 tonnes of wheat have reached Indian ports from Pakistan and even larger volumes have yet to arrive.
