June 30, 2011

 

Pakistani wheat exports to halt amid price anomaly

 

 

Wheat export may be terminated because of inconsistencies in pricing, according to the Wheat Traders Association of Pakistan.

 

Wheat exports from Pakistan touched figure of approximately 1.3-1.5 million tonnes by sea and about 1.8 million tonnes in total. These are expected to slow down or stop.

 

A Wheat Trade Association of Pakistan said an anomaly has been created with international markets taking a steep fall and domestic market increasing. Black Sea prices have touched US$250 FOB pmt. Last Pakistani sales are down to US$305 pmt FOB Karachi and further sales do not seem viable.

 

In view of current pricing, it is difficult for exporters to enter into new contracts. It seems likely that exporters will probably be losing money in export commitments that they have made and which they have yet to fulfill.

 

The government should watch the situation very carefully in view of reports that there are ample wheat stocks in Sindh and Punjab provinces. This stock is under potential threat of rains and floods.

 

"Current wheat price rise seems unwarranted due to available stocks. Provincial governments must follow an active Wheat Management Policy. Foremost would be to protect open stocks against weather calamities and floods.

 

Any extra wheat stocks may be put in export pipeline even with export incentives which will save storage and management cost. Till international market rises substantially, Pakistan's wheat exports will continue to remain at a standstill.

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