Barter trade: Pakistan to export 1m tons of wheat to Iran

Published: February 24, 2012
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Iran to export iron ore, fertiliser in exchange for wheat, says Minister for Water and Power Syed Naveed Qamar.

Iran to export iron ore, fertiliser in exchange for wheat, says Minister for Water and Power Syed Naveed Qamar.

ISLAMABAD: Under a barter system, Pakistan will export one million tons of wheat and 200,000 tons of rice to Iran in exchange for fertiliser and iron ore, in a move aimed at enhancing bilateral trade in the face of US sanctions against Tehran.

This was decided in a meeting between Federal Water and Power Minister Syed Naveed Qamar and visiting Iranian Deputy Commerce Minister Abbas Ghobadi here on Friday. Trading Corporation of Pakistan (TCP) chairman and Pakistan Agricultural Storage and Supplies Corporation (Passco) managing director were also present.

The meeting came following a decision on trade expansion taken by President Asif Ali Zardari and his Iranian counterpart Mahmoud Ahmadinejad in Islamabad last week.

Pakistan has a surplus stock of two to three million tons of wheat, particularly with Punjab – the major producing area – following a bumper season.

“Though prices of wheat in the international market are not as attractive right now compared to the domestic market, it will be better to export the surplus stock which will save a hefty amount being spent on storage,” a government official said.

“The barter trade will lessen the pressure on foreign exchange reserves which are being spent on import of fertiliser due to domestic shortage,” the official said.

Pakistan’s urea production capacity is estimated at 6.9 million tons – seventh largest in the world and enough to meet domestic requirements. The fertiliser industry has invested $2.3 billion over the last three years to enhance production capacity.

However, shortage of gas – a vital input for fertiliser manufacturing – has brought down production by two million tons, increasing the import burden this winter.

According to a statement issued after the meeting, Naveed Qamar asked Passco Managing Director Major General (retd) Sohail Shafkat to hold talks with the visiting Iranian minister and finalise details for the export of wheat. In the meeting, Passco will present samples of wheat to the Iranian delegation for examination.

Abbas Ghobadi said Pakistan’s rice was very popular in Iran and was cooked in every festival and special occasion. He expressed the desire that the Iranian delegation wanted to take a trip to the storage facilities to examine the quality and specification of wheat.

He also assured Pakistan that Iran would facilitate wheat exporters and simplify administrative procedures in order to improve trade connections between the two sides.

Published in The Express Tribune, February 25th, 2012.

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Reader Comments (27)

  • FJ
    Feb 24, 2012 - 3:43PM

    I like it!

    Recommend

  • Azfar Rahman
    Feb 24, 2012 - 4:28PM

    Pakistan Government should also try to export other agricultural produces , esp. maize as Iran badly needs the grains and Pakistan’s poor farmer needs good prices to come out of loses due to high input costs.

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  • Lord
    Feb 24, 2012 - 5:04PM

    keep the good work going.

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  • harish
    Feb 24, 2012 - 5:27PM

    be careful before earning the wrath of your saudi patrons!

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  • BB
    Feb 24, 2012 - 5:46PM

    @harish: You be careful too and not trade with Iran to avoid the wrath of your American patrons.

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  • Feb 24, 2012 - 6:02PM

    Have they completed Gas Pipeline project ??? and i know Pak will not

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  • Feb 24, 2012 - 6:06PM

    We will export our earth to Iran and import theirs. These barter trades will not work in the present days. Instead we better import their oil and sell to the people who export their agricultural products.

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  • Mawali
    Feb 24, 2012 - 6:38PM

    Great idea!

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  • Hindu Indian
    Feb 24, 2012 - 6:43PM

    @BB:
    From when did US become India’s patron , remember, US doesn’t launch drone attacks on Indian soil.

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  • Kaleem
    Feb 24, 2012 - 7:05PM

    It is in strategic interests of pak, though it sounds bad that we cant produce sufficient fertilizers even being an agriculture based economy.

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  • usmanx
    Feb 24, 2012 - 7:59PM

    Barter, Barter, Barter.

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  • BB
    Feb 24, 2012 - 8:22PM

    @Hindu Indian: It’s logic, if America doesn’t want India to trade with Iran, India will listen to America and follow suit since many of its interests depend on America. You can call it patronising or not, but it’s a fact.

    Don’t believe it? Take a look at 2005 when India had to vote against Iran in the International Atomic Energy Agency to please America. Even the Indo-US nuclear deal was conditional to India supporting the US over the Iran issue

    And in 2011 alone, India was forced to halt a $12 billion annual oil trade with Iran because of sanctions placed on Iran.

    So check your facts again, and accept that US is superpower and if needed, it will make patronise India if it has to advance a particular cause/position.

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  • Feb 24, 2012 - 8:36PM

    @BB:

    India is one of the few Countries allied with the US still importing Oil from Iran.

    India is opposed to the nuclear program of Iran that is why it voted, but not sanctions.

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  • Singh
    Feb 24, 2012 - 8:41PM

    BB
    Check your fact first, India is 2nd biggest importer of Oil after China even today.

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  • Indian muslim
    Feb 24, 2012 - 9:03PM

    BB :- Pls select whichever newspaper you think is unbiased :- India has increased Iran oil import.

    Tehran times
    http://tehrantimes.com/economy-and-business/95325-india-increases-iran-oil-imports

    wall street journal
    http://online.wsj.com/article/SB10001424052970204136404577210600571666544.html

    Hindustan times
    http://www.hindustantimes.com/India-news/NewDelhi/India-largest-importer-of-Iran-oil-for-a-month/Article1-812077.aspx

    Unfortunately it was not reported in ET.

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  • Fake Indian muslim
    Feb 24, 2012 - 9:11PM

    @Indian muslim: Read the other side of the coin:

    “In 2011, the $12 billion annual oil trade between India and Iran was halted due to extensive economic sanctions against Iran, forcing the Indian oil ministry to pay-off the debt through a banking system via Turkey”

    Articles:
    Wall Street Journal – http://online.wsj.com/article/SB10001424052970203513204576046893652486616.html (title: “India Joins U.S. Effort to Stifle Iran Trade”, open para:)

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  • Fake Indian muslim
    Feb 24, 2012 - 9:15PM

    To add on about the Indo-US nuclear deal, this is an interesting read:

    http://articles.timesofindia.indiatimes.com/2005-09-20/us/278450461nuclear-deal-security-council-35-member-board (title: US-India nuclear deal under Iran gun)

    So, very clear, that India’s interests depend on America and that if patronised by US, it may have to abandon Iran.

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  • Indian muslim
    Feb 24, 2012 - 9:58PM

    @Fake Indian muslim: Your article is of 2010 and here we are talking about 2012..lol.. Now you are exposed.

    India has a problem of payment in dollor, which is obvious and that is why it had tried through turky.. haha.. you can never be satisfied..

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  • Cautious
    Feb 24, 2012 - 10:49PM

    Good idea but the temptation for bribes and excessive middlemen may crater the deal.

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  • Pakistani Agnostic
    Feb 25, 2012 - 2:22AM

    @Kaleem:
    It is said that “However, shortage of gas – a vital input for fertiliser manufacturing – has brought down production by two million tons, increasing the import burden this winter.”

    Recommend

  • Mirza
    Feb 25, 2012 - 2:34AM

    There must be something wrong with this news. The grain importer Pakistan cannot export that much especially during the democratic govt! This is one of the best news that finally Pakistan is not just self sufficient in wheat, it is exporting to the tune of 1 million tons to just one country. Finally some good news about the economy of Pakistan and progress.

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  • Abba Jee
    Feb 25, 2012 - 8:49AM

    India should not interfere in the internal affairs of Ummah..

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  • Feb 25, 2012 - 12:22PM

    I had mentioned about our rice quality in some article and was ridiculed by Indians…now look, the world is queuing up to buy our goods…remember, yakeen kijiye, in 5 years, the world will fall over each other to invest and import from us…Zaid Hamid was always right…he is a master strategistRecommend

  • blaaah
    Feb 25, 2012 - 4:18PM

    errmmmmmm, so the wheat prices will be going up as Pakistan will be importing wheat for domestic use :)

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  • Head Shot
    Feb 26, 2012 - 4:50AM

    @Azfar Rahman:
    This is no ordinary trade, its an emergency settlement and No price will be paid … only raw material will be given by Iran, that raw material will probably be used in developing military equipment and warfare in order to fight inevitable war with USA

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  • Hadi Ansari
    Feb 26, 2012 - 2:52PM

    Two sovereign neighbourly nations with common borders and many identical problems/ issues have come to terms with ground reality.Its cost effective.Good luck and make sure to continue and expand the items for trade.Whether its barter,counter or normal trade makes no difference.Let other neighbours do the same.

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  • Feb 29, 2012 - 11:40AM

    @shamshad:
    i give you an 2iphone for a suzuki gs150 both have same price than what is wrong

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