‘Pakistan fulfilling Asian wheat demand’

Country maintaining cheap supply of the commodity.

SINGAPORE:

Asia’s immediate wheat demand is being met by ample supply from Pakistan, which is exporting existing inventories to make way for the new bumper harvest, Dow Jones, quoting trading executives, said on Monday.

“Pakistan has filled a crucial gap in Asian wheat trade due to the absence of supply from the Black Sea region,” said a Singapore-based executive with a global trading company. If Pakistan had not permitted wheat exports during this period of tight overall global supply, price-conscious buyers in South Asia and Southeast Asia would have had to turn to costly alternative supply from Canada, US and Europe.

The absence of Pakistan would have also increased demand pressure in Australia, where ports are already facing congestion and there are logistical delays in moving wheat from upcountry warehouses.

Pakistan approved wheat exports in December and shipments began the following month. In less than four months, it has shipped out an estimated 1.16 million tons.

International Grains Council has projected Pakistan’s wheat exports in the year ending June 30 at 1.6 million tons – the highest in at least four years.

Close to one million tons of Pakistan’s wheat has been exported in bulk shipments and 160,000 tons in containers, said Muhammed Najib Balagamwalla, Chairman of Seatrade Group, a Karachi-based commodities trading company. Bangladesh has emerged as the major buyer of Pakistan’s wheat, purchasing more than 700,000 tons, said traders. The country is one of the world’s largest wheat importers, buying around up to 3.5 million tons of the grain annually.

Earlier this year, Pakistan sold wheat at around $335 per ton, free on board, while recent sales have been at around $310 per ton, said Dow Jones. With freight charges ranging between $4 and $18 per ton for wheat export in containers from Pakistan, Southeast Asian buyers have locked in purchases at less than $320 per ton on a cost-and-freight basis for prompt shipment.

Published in The Express Tribune, April 19^th,  2011.