May 02, 2013
The federal government may impose a temporary ban on wheat export to complete its procurement target in the wake of a price hike in the domestic market because of hasty buying by exporters and market movers. Source told Business Recorder on Wednesday that massive buying by wheat exporters was hurting the government agencies” wheat procurement campaign.
Exporters and market movers are offering a better rate to growers against government agencies, which are bound to procure wheat at the support price of Rs 1,200 per maund, and as a result, growers are preferring to sell the commodity to exporters or traders, instead of government agencies. Wheat crop harvest recently began in Sindh and with the arrival of new wheat crop, the market expected some decline in the commodity”s prices.
However, the wheat price is rising and over the past two weeks, they registered an increase of up to Rs 170 per 100-kilogram bag. At present, wheat is being sold at Rs 3,050 per 100-kg, up from Rs 2,980 per 100-kg in the domestic market. “An upward trend in wheat price indicates a serious commodity crisis, necessitating the government”s ban on wheat export,” market source said.
Pakistan Flour Mills Association (PFMA) has already called for imposing an immediate ban on export of wheat for the next two months to stabilise prices in the domestic market. FMPA”s Chairman Ansar Jaweed wrote a number of letters to the Prime Minister and President to stop the wheat export to avoid a crisis. Sources said that the Sindh Food Department also called a meeting to review wheat issues. This meeting will be held Thursday and caretaker minister Kahlid Latif will chair the meeting.
“During the meeting, the Sindh government is likely to consider officially requesting the federal government for imposing a ban on wheat export for the next two to three months to complete wheat procurement”, they added. The Sindh government is facing difficulties in procuring wheat because of a higher commodity price in the domestic market. It has set a procurement target of 1.3 million tons of wheat for 2013. So far, the provincial government has only been able to procure just 400,000 tons of wheat.
“Under the present circumstances, the government may impose a temporary ban on wheat export, as government agencies are facing trouble procuring wheat and local prices are on the higher side because of massive buying by exporters,” sources said.
The federal government has decided to procure 7.1 million tons wheat as strategic reserves. Sindh food department has started its wheat procurement campaign, while Pakistan Storage and Services Corporation (Passco) and other departments would start procurement this week. “The government agencies are unlikely to achieve wheat procurement target, if a temporary ban is not imposed on wheat export,” they added. The country”s exported 146,198 tons of wheat worth $46 million during the first nine months of the current fiscal year. Source Business Recorder.