Export operation 2010-11 by Punjab Food
By Najam Ahmed Shah, Director Food Punjab
the closing of last year’s procurement, the Food Department
stocked a quantity of 6.6 million metric ton (MMT) of wheat
in July, 2010. The main buyers of the wheat from the Food
department are the local flour mills. A quantity of 2.8 MMT
was expected to be sold to the flour mills during the
current release year as per five years average, leaving a
huge balance of 3.8 MMT.
On account of this Provincial Government took up the matter
with the Federal Government to allow the export of wheat in
March 2010. On 21 December 2010, Federal Government allowed
export of wheat and within a fortnight the Food Directorate
made extensive negotiations with all the stake holders
especially the potential exporters and devised a
comprehensive strategy, frame work and Operational System
for export of wheat through private sector.
The first agreement of export of 100,000 MT of wheat was
signed by the Food Department and a Karachi based exporter
on 03-01-2011. Since then there was no looking back. It is
of paramount importance to explore here that during the four
years i.e. 2001, 2002, 2003 and 2006, Food Department
accumulatively sold 801,112 MT of wheat for export. During
these periods the sale process remained operative from the
start of the scheme till the closure but in the present case
827,397 MT of wheat has been sold to the exporters within
short span of three months only.
As a result of this ongoing exercise up to 08-04-2011,
department has successfully credited Rs 21 billion to Food
Account. This has resulted in the timely retirements of
loans and benefitted the government in shape of less
interest/mark up. This also boosted the good will of the
Food Department in the local and international markets.
To attract serious buyers a transparent and speedy system
was put in place which not only eliminated conformance costs
if any but also provided a corporate conducive environment
for business and trade. This aspect has duly been
acknowledged and appreciated by the firms, who worked with
the Food Department.
It is imperative to point out here that majority of the
firms were based in Karachi, but due to prompt, speedy and
un-hurdled export operations, they switched on their
business with Punjab Food Department instead of Sindh Food
Department, from where they were paying less Transportation
charges, Rs 25 less per mound of wheat purchased and no
stringent financial requirements like LC for credit, which
incurs another Rs. 25 per mounds extra cost. In addition to
this, another advantage of Sind over Punjab was long term
relationship between the Sind Food and Karachi based
exporters that needed to be matched by the Punjab Food
In order to
overcome such handicap, the Punjab Food took the following
Standard Form of Agreement for export.
Standard In land letter of credit for 45 Days
with deferred payment.
Standard Options/packages to opt for based on
quantity for export.
Advertisement in Newspapers and placement of
all information and data on the Food Department website
Information Cell was created at Lahore
Meetings were held at Karachi with exporters
by the Director Food Punjab.
Rs. 25 per mound
rebate incentive as sharing of transportation charges was
given to the exporters on successful export of 100,000 MT.
This served as performance based reward for serious exports.
Information sharing in the export supply
chain and immediate support to exporters in case of any
bottlenecks or difficulties in transaction associated not
only with the Government of Punjab but also with Federal
Government agencies like KPT, Port Qasim Authority, FAP, NLC
and private transporters and international buyers. The
success story of getting prioritized 2 berths at KPT and
opening of Marginal wharf for wheat exports at PQA are few
such examples. The directorate adhered to zero tolerance
against delays and defects. the following were ensured
One day process time of LC.
Zero tolerance against corruption or
inefficiency at any level.
24/7 issuance of wheat from storage centres.
Date wise maintenance of accounts for Firms,
District & Division.
Error free and exporter friendly speedy