US pressure ignored, Pakistan and Iran strike barter trade deal

Published: September 6, 2012
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The two neighbouring countries struck the deal during visit of a Pakistani delegation to Iran last month.

The two neighbouring countries struck the deal during visit of a Pakistani delegation to Iran last month.

ISLAMABAD: Shrugging off pressure from the United States which has imposed harsher sanctions on Tehran, Pakistan and Iran have signed a barter trade agreement – a key feature of which is export of one million tons of wheat to Iran at $300 per ton.

The two neighbouring countries struck the deal during visit of a Pakistani delegation to Iran last month.

“We have signed an accord with Iran for export of one million tons of wheat,” a senior official of the Ministry of Food Security and Research told The Express Tribune.

He said an Iranian team would arrive in Pakistan soon to examine the quality of wheat and after that exports would kick off.

“The two countries have set criteria and the Iranian team will conduct tests to check the quality of wheat before shipment.” In exchange, Pakistan will import fertiliser from Iran.

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

Iran will pay $300 per ton, the average price of wheat in the international market in July. However, Pakistan will pay for fertiliser the price prevailing at the time of shipment.

At present, the price of urea in the international market stands at $399 per ton, the latest rate quoted by the Trading Corporation of Pakistan (TCP), which is tasked with importing urea to meet its shortage in the country. In the domestic market, the urea price was Rs1,659 per 50kg bag.

When approached, Ministry of Food Security and Research Secretary Ahmad Bakhsh Lehri confirmed that Pakistan and Iran had struck the deal for wheat export. He also said “we will buy fertiliser in exchange.”

Suspension or very low supply of gas to fertiliser plants has widened the gap between demand and supply of urea in the country, prompting the government to aggressively import the commodity, which is vital for cultivating crops.

In addition to the import of fertiliser from Iran under barter trade, the Economic Coordination Committee (ECC) of the cabinet – the highest economic decision-making body – has permitted import of 300,000 tons of urea from other sources. The Ministry of Industries had expressed the desire to import 600,000 tons.

The government will have to bear a huge subsidy of Rs1.77 billion on 300,000 tons of imported urea according to current market prices, a further burden on the finance ministry which is reeling from lack of finances.

Published in The Express Tribune, September 6th, 2012.

 

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Reader Comments (16)

  • naeem khan Manhattan,Ks
    Sep 6, 2012 - 7:23AM

    No fair tax collection from the landed class and now go ahead subsidize their Urea too like they can’t afford it. The NA is full of these people driving the best SUVs the money could buy. No wonder the country is going down the tube economically.

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  • khan
    Sep 6, 2012 - 7:51AM

    95% of country is starving and below poverty line, one of the lowest health index in world.. and we ARE EXPORTING WHEAT??? nonsense…

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  • Vikas
    Sep 6, 2012 - 8:22AM

    Pakistan don’t act smart now.

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  • Freedom Seeker
    Sep 6, 2012 - 11:39AM

    If there is extra wheat then its better to export it rather then spoil it in mismanaged stores in Pakistan.

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  • Sep 6, 2012 - 12:05PM

    @khan:
    govt: need money that is why they are exporting, poor did not need anything at all….. :(

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  • khan of quetta
    Sep 6, 2012 - 1:03PM

    good we have historical links with iran ancient links that go back to indus valley civilizationRecommend

  • antanu g
    Sep 6, 2012 - 1:48PM

    @khan:
    get your data right….in poverty index, pakistan ranks higher than our india.

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  • Raheel
    Sep 6, 2012 - 1:48PM

    Few months ago I was speaking to one Pakistani who was saying that India is claver to struck barter trade with Iran which was claver but Pakistan is not claver that is why Pak didnt do it. Now when we Pakistani came up with agreement, we Pakistani criticise again.
    The problem with Pakistani is we just love to criticise. One guy will hate India and on the other side he will watch Indian films and/or TV all the time, even though Pak TV and films are ban in India.
    This Pakistani nation just love to criticise others but don’t look at them self. that is why country is going down not because of our leader.

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  • antanu g
    Sep 6, 2012 - 1:49PM

    @Vikas:
    why….? they have every rights to act smart as per their convenient…or you feel bad that pakistan has excess food and exporting it.

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  • antanu g
    Sep 6, 2012 - 1:58PM

    shows that despite hardship, pakistan is capable of taking decisions which is in its interest.bad omen for US …and its slaves.

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  • S
    Sep 6, 2012 - 2:02PM

    @khan you are right, but usually we sell good quality wheat for higher price and then buy a bit less quality wheat from some one else for a cheaper price and profit the difference. But i agree with you!!

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  • Cautious
    Sep 6, 2012 - 3:57PM

    You have run this same article before — so why are you running it again? Reminds me of some of the repeat stories of Thar Coal and the Iranian pipeline which are two other projects were never go anywhere.

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  • Ejaz
    Sep 6, 2012 - 4:16PM

    A smart move; well done Pakistan and Iran.

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  • Sep 6, 2012 - 4:52PM

    Do, just do now,what is favor in the country,no need fear from anyone power who imposed endless war on us, who has destroyed us by its hypocrisy and non favorable polices.

    Iran offered us gas,Iran offered us electricity and on the other hand,United States refused us to provide civil nuclear technology and the same was given to India.What kind of American friendship.
    In the comparison, Iran looks a real friend of Pakistan.

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  • bangash
    Sep 6, 2012 - 8:33PM

    why are you bartering if you are no unafraid of sanctions ?

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  • hakeem
    Sep 7, 2012 - 12:57PM

    Insane america if they strict the sanction,pakistan will close NATO to supply route.

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