November 26, 2003



Pakistan To Persist in Ban on Import of India Wheat

Pakistan, which plans to import 500,000 tons of wheat to make up a domestic shortfall caused by dry weather, will stick to a two-year ban and not accept any grain from rival and neighbour India, officials said on Monday.


"Indian wheat is banned and it will remain banned in Pakistan," an official at Food and Agriculture Ministry told Reuters.


Pakistan imports small amounts of agricultural produce from India, including pulses and raw chillies, but most other items are officially banned.


Two years ago, Pakistan banned the import of Indian grain, saying it was contaminated by Karnal bunt fungus.


India rejects the accusation and Pakistani traders said they consider the ban to have been politically motivated. Traders say imports from India would be the most economical option for Pakistan because of lower freight costs given the land border between the countries.


"Every other country is buying wheat from India, except is more a political move," a trader in Karachi said of the continuing ban.


Agriculture ministry spokesman Mohammad Hanif said Pakistan would also discourage imports of Indian grain via third countries or for onward shipment.


"There is a total ban on the import or overland transport of Indian wheat," he said. "There is no second thought about it." Agriculture minister said earlier this month that the country planned to import 500,000 tons of wheat to stabilise rising prices and build up strategic reserves after dry winter weather damaged the domestic crop.


Last week, the cabinet removed a 25% import duty on wheat, but the decision to launch the imports through the state-run Pakistan Agriculture Storage and Supply Corp is still awaiting final government approval.


The imports would be Pakistan's first in nearly four years. In August, it rejected a request by local traders to allow the import of 200,000 tons of Indian wheat, citing the concern about fungus. It also barred the UN World Food Programme from transporting Indian grain to Afghanistan via Pakistan last year. Although large quantities of produce are smuggled from India into Pakistan, analysts say Islamabad is worried that permitting imports would enable its giant rival to dominate the market both at home and in Afghanistan.


Karnal bunt is not dangerous to humans or animals but causes a foul odour and alters the colour of contaminated grain. Another ministry official said the ministry had suggested that the government import wheat from either Australia or the United States.


Pakistan's wheat output was about 19.25 million tons in the last 2002-03 (Nov/April) crop year, short of the target of 19.70 million tons. Pakistan consumes a little over 20 million tons of wheat annually, but government officials say the lower harvest is not immediately expected to affect supply as the country has carry-over stocks of more than a million tons.

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