Traders buy two million tons of wheat for export

The government expects a harvest of 23.5 million tons against a target of 25 million tons in 2010-11.

ISLAMABAD: Traders have bought about two million tons of wheat for export and shipments have already started, government officials and traders said on Tuesday.

The government in December lifted a ban on exports imposed in 2007 because of domestic shortages and high prices. Stocks soared after a bumper crop of 23.86 million tons in 2009-10 added to a carryover of 4.2 million tons from the previous crop.

The central Punjab province, which grows most of the country’s wheat, intends to export over two million tons from its surplus stocks. It has already sold 1.4 million tons of that to local traders for export, Provincial Food Minister Abdul Ghafoor said.

A Karachi-based trader, Javed Thara, confirmed deals with the Punjab government and said traders had also bought some 600,000 tons from Sindh, the second-largest wheat producer.

“Traders have signed export deals with foreign buyers for up to 700,000 tons, out of which some 40,000 tons have already been shipped out,” Thara said. He expected some 100,000 tons of wheat to be shipped this week to Bangladesh and some Middle Eastern countries, including Jordan.

Johar Ali Qandhari, a wheat trader and Chairman Korangi Association of Trade and Industry, said that the country had recently sold wheat in the international market at prices ranging between $333 and $338 a ton FOB (freight on board).

Pakistan, Asia’s third-largest wheat producer, consumes about 22 million tons of wheat annually. Sowing for the 2010-11 crop is finished and the government expects a harvest of 23.5 million tons against a targeted 25 million tons.

A carryover from previous harvests means there will still be enough surplus for exports, industry officials say. The exact crop estimates are expected to be available by March.

Published in The Express Tribune, February 2^nd, 2011.