PASSCO awaits government nod for wheat export
It is already releasing 1m tons in the domestic market.
Passco and the Iranian government had finalised a deal for the export of 100,000 tons of wheat at $300 per ton in December last year. PHOTO: FILE
LAHORE:
Pakistan Agriculture Storage and Services Corporation (Passco) is releasing one million tons of wheat in the domestic market, but efforts to export another one million tons appear to have been stymied as the state-run corporation faces a shortage of funds, sources say.
“The wheat export plan is in jeopardy as the federal government has not yet approved Passco’s request for export and release of Rs9 billion to cover transport, handling and other expenses,” a senior Passco official said but requested anonymity.
The Economic Coordination Committee (ECC) has given the go-ahead to Passco to release one million tons of wheat, out of its stock of 2.1 million tons, in the domestic market to check the increase in flour prices.
“Wheat is being sold in the open market through tenders at the rate of Rs1,100 per 40 kg, excluding the price of bag,” the official said.
Potential overseas buyers were in constant contact with the Ministry of National Food Security and Research for the purchase of wheat at the agreed price of $300 per ton, but the delay had sparked worries and could cause a loss to the public exchequer, he added.
Passco and the Iranian government had finalised a deal for the export of 100,000 tons of wheat at $300 per ton in December last year. Before shipment, the commodity should be processed at a Karachi plant to remove all impurities. Half of the quantity, 50,000 tons, was scheduled to be shipped to Iran in the second week of January and the remaining one month later by the end of February.
Other countries like Brazil, Saudi Arabia, Bangladesh and Japan were also interested in importing Pakistani wheat at prices higher than that offered by Iran, the official revealed.
In December 2012, Passco had asked the federal government to provide Rs9.5 billion for bearing transport, handling and other expenditures in the export of wheat. However, the government has yet to respond.
Passco has 2.1 million tons of wheat worth Rs66 billion stored in Punjab and Sindh, which it has to dispose of before the start of next procurement season in April.
In the 2012 season, Passco purchased 1.434 million tons to meet the needs of Gilgit-Baltistan, Khyber-Pakhtunkhwa, Balochistan, Azad Jammu and Kashmir and armed forces. For the commodity, purchased at Rs1,050 per 40 kg, Passco took about Rs50 billion in loans from banks at 16% interest rate.
Rest of the commodity was from 2010 and 2011 crops. The quality of wheat purchased in 2010, estimated to be 250,000 bags (100kg each), has deteriorated as its colour has turned black from brown.
“Passco has the capacity to store only 431,000 tons, but it is taking care of 2.1 million tons with limited resources,” the official said.
If Passco could not export to Iran, then it would sell 500,000 tons to provinces facing shortage and the defence forces, he said.
Owing to the old stocks, Passco may not be able to purchase more than one million tons from farmers in the 2013 season. It will take loans of Rs30 billion for this season.
Speaking to The Express Tribune, Passco General Manager Field Colonel (Retired) Tanveer Ahmed said Passco, on the recommendation of the ECC, sold 400,000 tons of wheat in the open market last month at Rs1,100 per 40 kg.
For the remaining 600,000 tons, it floated a tender on Tuesday inviting private parties to bid for the commodity. “This wheat will be disposed of in coming days and the carry forward stock will drop to one million tons,” Ahmed said.
Discussing the export to Iran, Ahmed said the government had yet to take a decision and “we are ready to push ahead with the plan if funds are provided.”
Published in The Express Tribune, March 7th, 2013.
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Pakistan Agriculture Storage and Services Corporation (Passco) is releasing one million tons of wheat in the domestic market, but efforts to export another one million tons appear to have been stymied as the state-run corporation faces a shortage of funds, sources say.
“The wheat export plan is in jeopardy as the federal government has not yet approved Passco’s request for export and release of Rs9 billion to cover transport, handling and other expenses,” a senior Passco official said but requested anonymity.
The Economic Coordination Committee (ECC) has given the go-ahead to Passco to release one million tons of wheat, out of its stock of 2.1 million tons, in the domestic market to check the increase in flour prices.
“Wheat is being sold in the open market through tenders at the rate of Rs1,100 per 40 kg, excluding the price of bag,” the official said.
Potential overseas buyers were in constant contact with the Ministry of National Food Security and Research for the purchase of wheat at the agreed price of $300 per ton, but the delay had sparked worries and could cause a loss to the public exchequer, he added.
Passco and the Iranian government had finalised a deal for the export of 100,000 tons of wheat at $300 per ton in December last year. Before shipment, the commodity should be processed at a Karachi plant to remove all impurities. Half of the quantity, 50,000 tons, was scheduled to be shipped to Iran in the second week of January and the remaining one month later by the end of February.
Other countries like Brazil, Saudi Arabia, Bangladesh and Japan were also interested in importing Pakistani wheat at prices higher than that offered by Iran, the official revealed.
In December 2012, Passco had asked the federal government to provide Rs9.5 billion for bearing transport, handling and other expenditures in the export of wheat. However, the government has yet to respond.
Passco has 2.1 million tons of wheat worth Rs66 billion stored in Punjab and Sindh, which it has to dispose of before the start of next procurement season in April.
In the 2012 season, Passco purchased 1.434 million tons to meet the needs of Gilgit-Baltistan, Khyber-Pakhtunkhwa, Balochistan, Azad Jammu and Kashmir and armed forces. For the commodity, purchased at Rs1,050 per 40 kg, Passco took about Rs50 billion in loans from banks at 16% interest rate.
Rest of the commodity was from 2010 and 2011 crops. The quality of wheat purchased in 2010, estimated to be 250,000 bags (100kg each), has deteriorated as its colour has turned black from brown.
“Passco has the capacity to store only 431,000 tons, but it is taking care of 2.1 million tons with limited resources,” the official said.
If Passco could not export to Iran, then it would sell 500,000 tons to provinces facing shortage and the defence forces, he said.
Owing to the old stocks, Passco may not be able to purchase more than one million tons from farmers in the 2013 season. It will take loans of Rs30 billion for this season.
Speaking to The Express Tribune, Passco General Manager Field Colonel (Retired) Tanveer Ahmed said Passco, on the recommendation of the ECC, sold 400,000 tons of wheat in the open market last month at Rs1,100 per 40 kg.
For the remaining 600,000 tons, it floated a tender on Tuesday inviting private parties to bid for the commodity. “This wheat will be disposed of in coming days and the carry forward stock will drop to one million tons,” Ahmed said.
Discussing the export to Iran, Ahmed said the government had yet to take a decision and “we are ready to push ahead with the plan if funds are provided.”
Published in The Express Tribune, March 7th, 2013.
Like Business on Facebook to stay informed and join in the conversation.