LAHORE: The government should make provisions for the export of wheat flour rather than raw wheat as the former is priced higher and would earn more foreign exchange, stakeholders of flourmills industry told The Express Tribune.
Haji Maqsood, chairman of the Pakistan Flour Mills Association, said that there was around 8.2 million tone surplus wheat in the Punjab alone, “Around 7 million tonnes of wheat is stockpiled with the Food Department and another 1.2 million tonnes with the Pakistan Agricultural Storage and Services Corporation (PASSCO),” Maqsood said.
He said that the government should play a proactive role and make sure that the surplus wheat was exported to Afghanistan. He added that exporting wheat flour instead of raw wheat would be more profitable because it was priced higher. Bilal Aslam Soofi, chairman of the standing committee on flour mills industry, said that the government should also subsidise the exports. He said that the prices of wheat and flour in the international market and Afghanistan were less than in Pakistan and the government would have to pay a $80 subsidy per tonne of wheat in order to meet the gap. “It’s not a very big amount considering that it would save the country at least Rs4billion to Rs5billion,” Soofi said. The wheat price in Afghanistan currently stands at Rs27 per kg, he added.Soofi said wheat or flour export to Afghanistan was not banned but this was not enough. They would need government support. He added that the economy would lose out if raw wheat rather than flour was exported.
He said that countries like Iran, Italy, Ukraine and Kazakhstan have already landed their wheat stocks in Afghanistan
“The price of wheat in international market is $180-220 per tonne (Rs 612-640 per 40kg) while its price in the local market is about $280-300 per tonne (Rs 950-1,050 per 40kg),” he said.
Maqsood said that at such rates if the government exported wheat instead of flour it would lose around Rs 10billion per million tonne. On the other hand, a subsidy of Rs6 billion to flourmills would help all the stakeholders, he said. “In this way, the farmers would lose nothing and the government would get rid of the extra stock of wheat and flourmills will get to utilise their capacity,” he said.
Published in the Express Tribune, June 1st, 2010.