ECC allows wheat export

Ban on wheat export be lifted to capitalise on higher global prices and retire central bank debt.

ISLAMABAD: The Economic Coordination Committee (ECC) on Tuesday approved the export of wheat in a meeting today in Islamabad.

It was decided that wheat export will be permitted in a bid to encourage the growth of the agricultural sector.

ECC also approved the government's gas load management plan to mange the shortage of natural gas during winter.

Finance Minister Abdul Hafeez Sheikh chaired the meeting attended by other ministry of finance officials.

Updated from print edition (below)

Pakistan may allow wheat export

Pakistan may lift ban on wheat export to capitalise on higher global prices and retire the central bank debt, but the move may compromise food security as the next crop is likely to remain five million tons short of production target because of massive flooding.

On Tuesday (today), the Economic Coordination Committee (ECC) of the Cabinet is going to review the Food and Agriculture Ministry proposal of lifting ban on wheat export. A senior official of the food ministry told The Express Tribune: “The permission is open-ended, as the ministry has not put any volume in the summary”. The sources said the ECC may allow 500,000 tons to 700,000 tons of wheat export. Pakistan’s annual wheat consumption is estimated at 23 million tons. The grain is also smuggled to Afghanistan.

The sources say the other reasons for wheat export are the poor storage capacity and the rising SBP debt to the federal and provincial governments for buying the commodity from the market. The official statistics show the provincial governments have borrowed over Rs315 billion for the purpose. The total commodity financing has reached Rs426 billion since October. SBP Governor Dr Shahid Hafiz Kardar recently described it as one of the main reasons of crowding out the private sector credit.

The ECC will also consider the ministry of petroleum and natural resources proposal for two-days-a-week gas load-shedding for the industry and the CNG stations in order to ensure smooth gas supply to the domestic consumers. The ECC will also consider allowing 1.2 million tons fertiliser import to meet the Rabi crops needs.

Published in The Express Tribune, December 7^th, 2010.