December 20, 2011

Pakistan's surplus wheat export in danger

Pakistan will most likely spoil its surplus wheat due to its high price compared to the international market and substandard storage system.

Experts feared that fresh imminent increase in the wheat support price will halt export of wheat and its products. At present, 5.5 million tonnes of wheat was lying in stores and open places with public sector departments while our requirement for next few months was only two million tonnes. They said 1.4 million tonnes of wheat was present only in Punjab and added that one of the prime reasons of piling up of this wheat stock was high prices.

Former chairman of the Flour Mills Association, Asim Raza Ahmed, while talking to The Nation, claimed that wheat prices were already high in Pakistan as compared to other countries. Supporting his claim, he said Russia had sold wheat to Egypt and Iraq at the rate of US$220 to US$250 dollars per tonne compared to Pakistani wheat price of PKR23,750 per tonne (US$264.4 per tonne).

He also said that wheat was playing an important role in agriculture of Pakistan. Pakistan is not only self-reliant in this crop from the last three years but also exporting wheat. Pakistan exported 1.7 million tonnes of wheat and 1.3 million tonnes of wheat products this year and was competing on this front with Russia, Turkey, Australia, India and America. Some experts were of the view that the government's poor measures for utilizing bumper wheat crops may cause it billions of rupees losses again because of substandard ways of stocking of the commodity in packing material, which is not recommended by the experts.

The upcoming wheat harvesting season will be overwhelmingly tremendous as the government increased the wheat support prices to PKR1050 (US$11.7) for encouraging the production of the commodity. However, it will also be harmful for the growers, as they will fail to dispose of their commodity due to high rates.

The country is expected to harvest more than 25 million tonnes of wheat in the next season as against the national requirement of 21 to 22 million tonnes, leaving surplus of about three to four million tonnes of wheat for export market, which should be exported to earn precious foreign exchange for the country.

Experts said that the government must export wheat to different countries because it could compensate the expenditure of the government it carried out on the purchase of high cost commodity with high bank's lending interest. They said that wheat should be preserved properly keeping in view the standards of exports market particularly the health safety complaints without contamination of chemicals emitted from polypropylene bags.