Government still considering
(August 07 2010): Pakistan is still considering exporting
some surplus wheat to capitalise on higher global prices
sparked by Russia's move to halt grain exports, officials
said on Friday, after earlier caution over sales due to a
weak market. "The volume could be just above half a million
tonnes," one official said.
Pakistan, Asia's third-largest wheat producer, harvested
23.80 million tonnes of wheat from the 2009/10 crop and,
along with a carryover of 4.22 million tonnes, and has a
stock of more than 28 million tonnes of wheat. Annual demand
is around 23 million tonnes. US wheat futures jumped 6
percent on Friday, taking weekly gains to more than 25
percent as Russia's move to temporarily ban grain shipments
triggered a buying frenzy.
The market bottomed out in early June due to ample global
supplies after two years of bumper crop world-wide. The
government in April decided to export up to 2.0 million
tonnes of wheat, but has since withheld plans mainly because
of low prices in the international market before this week's
Officials in the food ministry said Pakistan might not
export that whole amount to ensure supplies after the worst
floods in 80 years, which affected millions of people and
killed over 1,600. The floods are still headed south to
Sindh province after raging through the agricultural
heartland of Punjab. "While it is now unlikely Pakistan will
export 2 million tonnes because of the recent floods, there
is still an option to export some, but there is no final
decision," said one official who declined to be named as he
was not authorised to speak.
"It could be in the range of 500,000 to 700,000 tonnes."
Another official said that there was no further development
with regard to exporting wheat, but that the option was
"still under consideration". The government had also been
discussing exporting surplus wheat to Iran, Iraq and
Bangladesh on a government-to-government basis but no
decision has yet been made.
Pakistan's poor storage capacity has been a factor in the
decision to export excess wheat. Some 78,000 tonnes of the
grain had been either destroyed or damaged in recent monsoon
rains in Punjab. The government may have to divert some
wheat supplies to the north-western Khyber-Pakhtunkhwa
province, the hardest-hit region hit by the floods which now
faces the prospect of severe food shortage.
Wheat is a staple in Pakistan and any shortages or steep
rise in prices will fuel anger with civilian governments
that are largely viewed as corrupt and weak and are unable
to handle major crises, leaving the powerful army to step
in. A ban on wheat exports was imposed in 2007 because of
shortages and high prices.
Courtesy: The DAWN