Pakistan likely to scrap wheat exports

Pakistan has lost at least 725,000 tonnes of wheat in the country's worst flooding in 80 years.


Reuters August 27, 2010

ISLAMABAD: Pakistan is likely to scrap plans to export 2 million tonnes of wheat after devastating floods washed away stored grain, threatening to further tighten global supplies hit by a severe drought across the Black Sea region.

Pakistan has lost at least 725,000 tonnes of wheat in the country's worst flooding in 80 years, although traders said there are still enough stocks to meet demand until the next harvest, meaning imports are unlikely.

"Currently, there are no talks of exporting wheat," one Pakistan food and agriculture ministry official, who is familiar with the discussions, told Reuters on condition of anonymity.

"The plan to export 2 million tonnes of surplus wheat is likely to be shelved."

A second official said that the government was closely monitoring the situation and confirmed the likely cancellation of the export plans. Given the devastation, the government wants to ensure there are no shortages, especially in the flood-affected areas.

Pakistan, Asia's third largest wheat producer, said in April it would export 2 million tonnes of wheat after a bumper crop of 23.86 million tonnes in 2009/10, and a carryover of 4.2 million tonnes from the previous crop.

"Even after meeting demand and keeping strategic reserves of 2 million tonnes, the government will still have a surplus of up to one million tonnes," said Naeem Butt, a wheat trader and an official of the Pakistan Flour Mills Association in Khyber-Pakhtunkhwa.

“There is absolutely no question of wheat imports, if you have that much of wheat in your stocks."

The floods have damaged up to 600,000 tonnes of privately-stored wheat, according to initial estimates, and a food ministry official said on Thursday that another 125,000 tonnes of wheat in government stores had been washed away.

Wheat is a staple food in Pakistan with about 22 million tonnes consumed each year. Any shortages or steep price hikes would inflame public anger toward the government, which is facing mounting criticism over its handling of the catastrophe.

Pakistan banned wheat exports in 2007 because of shortages and high domestic prices.

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