Sindh

Crop woes: Sindh demands rebate on wheat export

Finds it hard to release stocks in market due to weak demand.

Peer Muhammad January 05, 2015

The provincial government has suggested to the centre to allow export of 500,000 tons of locally produced wheat. STOCK IMAGE

ISLAMABAD: The Sindh government has asked the federal government to bear the cost of rebate on the export of 660,000 tons of surplus wheat stocked in storages of the province.

The demand came as the release of wheat from the storages was unsatisfactory because of a glut of imported commodity in the market, which was being sold at cheaper prices, sources in the Sindh food and agriculture department told The Express Tribune.

In order to dispose of the surplus stock, the provincial government suggested to the centre to allow export of 500,000 tons of domestic and 160,000 tons of imported wheat at the issue price of Rs3,450 per 100kg bag and pay rebate to make the shipments viable.

A source in the Ministry of National Food Security and Research said it seemed that the federal government had no choice but to allow export of existing stocks by offering the incentive of rebate. If the issue dragged on, he said, it would severely hurt wheat farmers as prices of the new crop would crash in the wake of weak demand.

Earlier in a meeting held in December, the Ministry of National Food Security and Research had pointed out that 3.25 million tons of surplus wheat was available after meeting the country’s consumption needs.

During the deliberations, provinces complained about the slow release of wheat stocks to the private sector and asked the ministry to frame a strategy for disposing of the surplus produce.

After a comprehensive review of the country’s food security situation, participants of the meeting agreed that the best way out was to export the surplus crop.

They also noted that exports would enable public-sector departments to prepare the domestic market for the new crop and would provide an opportunity to cope with the challenge of financing required to bear the cost of storage.

Published in The Express Tribune, January 6^th, 2015.

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