June 16, 2011

Pakistan may miss wheat export target of three million tonnes

Pakistan may miss a target to export three million tonnes of wheat by mid-July, after a decline in global prices slowed sales, traders said on Wednesday (Jun 15).

Pakistan, Asia's third-largest wheat producer, resumed exports in January for the first time in three years after the government lifted a ban in December.

The government allowed the private sector to sell three million tonnes overseas by July 15. Traders said they could miss the target by around 500,000 tonnes.

"We are not getting good prices. The international prices have come down. Even they are lower than our cost," Javed Thara, a wheat exporter, said. "It seems impossible to achieve the target." Wheat futures on CBOT have fallen nearly 20% since hitting a high for the year just short of US$9 a bushel in February.

The arrival of Black Sea wheat in July would further hamper Pakistan's exports, Thara said.

"Exports for us would be difficult because our prices are not as competitive as theirs," he said.

Russia may export around eight million tonnes of grain in July-September, although its exportable surplus is expected to be significantly higher, the head of Russia's main grain industry lobby said. Russia had banned wheat exports last year after a drought cut its harvest.

Pakistan's 2010-11 season wheat crop output is 24.2 million tonnes while there is 3.2 million tonnes of carryover from the previous crop, according to the food ministry. The country's domestic consumption is around 22 million tonnes.

Shakeel Ahmed Khan, who is in charge of wheat transactions at the food ministry, said more than 1.4 million tonnes have been exported this year. Trader Johar Ali Qandahari said no new contracts were being made due to the decline in prices. "Whatever is going overseas are old deals, not new ones," he said.