Barter trade: Iranian team takes wheat samples for quality check

If approved, Pakistan will export 1m tons in exchange for fertiliser, iron ore.


Zafar Bhutta November 09, 2012

ISLAMABAD:


Pakistan and Iran are slowly moving towards barter trade as Iranian inspectors have collected samples of Pakistani wheat for quality check, a step that may lead the two countries to an arrangement under which Pakistan will export one million tons of wheat.


According to sources, an Iranian team recently visited Pakistan and took samples of wheat to soothe away fears about quality. In exchange for wheat, Tehran will export fertiliser and iron ore to Pakistan.

“Yes, Iranian quality inspectors came to Pakistan and got samples of wheat to pave the way for export,” Ahmed Bakhsh Lehri, Secretary Food Security and Research, told The Express Tribune.

After examination of wheat, Pakistan will start exporting the commodity to Iran, he said.

In July this year, Pakistan agreed to supply wheat at $300 per ton, the price prevailing at that time. In exchange, Pakistan will import fertiliser, but the two sides have yet to finalise a price.

Pakistan has a surplus wheat stock of 1.5 million tons and even after export of one million tons, 500,000 tons will be left in reserves.

The headway in the barter trade plan is made after Pakistan and Iran broke a deadlock over wheat quality on the intervention of President Asif Ali Zardari in July.

Iran had expressed concern over the quality of wheat, which had 0.3% karnal bunt (a fungal disease) as Tehran sought a commodity free of fungus.

During negotiations, Pakistan officials insisted that 0.3% fungus was not harmful to human health as the internationally acceptable level was higher at 1%. Pakistan’s wheat was in line with the standards applied in the United States and Europe, they said.

The talks concluded with an understanding that wheat export would start only after an Iranian team conducted tests to check the quality.

Earlier in February, then water and power minister Syed Naveed Qamar and visiting Iranian Deputy Commerce Minister Abbas Ghohadi agreed that Tehran would import one million tons of wheat as well as 200,000 tons of rice.

In return, Pakistan would purchase iron ore from Iran for state-owned Pakistan Steel Mills, a financially-troubled industrial giant because of acute shortage of raw material and other problems. Pakistan also agreed to import fertiliser to meet domestic demand and arrest rising prices.

Published in The Express Tribune, November 10th, 2012.

COMMENTS (1)

Cautious | 11 years ago | Reply

This negotiation seems to have been dragging on for a long time --- the market price of wheat and fertilizer are well known and testing wheat is a pretty straight forward process --- normally even a novice could put together this deal. Delay would indicate that either the parties are not that interested or maybe the incentives/bribes are the real hold up.

Replying to X

Comments are moderated and generally will be posted if they are on-topic and not abusive.

For more information, please see our Comments FAQ