Flour mills ask govt to continue providing wheat subsidy

Deadline for the incentive on exports ended on Sept 30 this year

ISLAMABAD: Flour millers of the country have pressed the federal government to set a new timeframe for the payment of subsidy on export of surplus wheat stock.

The request was made by the Pakistan Flour Mills Association in a letter to the Ministry of National Food Security and Research, officials say.

Earlier, the deadline for the subsidy, announced to encourage the export of unsold wheat before the arrival of fresh crop, ended on September 30 this year.

The Economic Coordination Committee (ECC) of the cabinet approved on February 9 a subsidy of $45 per ton for Sindh and $55 per ton for Punjab on the export of 1.2 million tons of wheat to enable the exporters to compete effectively in the international market because of high cost of Pakistani wheat in the region.

Initially, the subsidy was given for four months, but later the ECC extended the deadline twice.

However, despite the incentive, exports fell way short of the target as only around 300,000 tons could be exported because of the weak international market.

In order to further facilitate the exporters, the federal government has permitted the provinces to export their wheat stock if they get orders from overseas.

An official in the Ministry of National Food Security and Research said the ministry, after receiving the request from the flour mills association, wrote to the provinces to seek their comments on whether they were still interested in exporting wheat with the subsidy.

“We will prepare a summary for the ECC again if the provinces show their interest in this regard,” he said.

The official, however, hinted that the ministry had no qualms about further extending the timeframe set for the subsidy, which would provide the exporters with another opportunity to dispose of surplus wheat before the fresh harvest.

According to officials, negotiations are under way with the Jordanian government as it has expressed interest in purchasing 400,000 tons of wheat from Punjab. Apart from this, Sunny Trader - a private-sector concern - has also sought approval of the federal government for the export of 500,000 tons to Afghanistan.

However, the ECC has not yet given the go-ahead to a summary filed in this regard and is waiting for input of the ministries concerned.

At present, Pakistan has more than 3 million tons of surplus wheat in storages and it wants to sell the commodity to create space for the new crop.

Published in The Express Tribune, October 11^th, 2015.

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