March 23, 2006	Thursday	Safar 22, 1427

KARACHI, March 22: Export contracts worth millions of dollars for wheat products could not be materialized as exporters are waiting for relevant SRO giving an exemption from 15 per cent export duty as decided by the government early this year. A large number of exporters have entered into contracts for the export of wheat products, such as wheat flour, plain flour (maida), semolina (sujee) and wheat bran which are in great demand in African and Far Eastern countries and Yemen.

“Our members after getting their export contracts matured approached the customs authorities and were told that the relevant SRO for the waiver of 15 per cent duty on export of wheat and wheat products was not received by them,” Karachi Four Mills Association (KFMA) vice-chairman Johar Ali Kandhari told Dawn on Wednesday.

As a result of this, he said, export contracts worth millions of dollars are in jeopardy. Mr Kandhari said: “A free trade policy for wheat will benefit the country as this will not only encourage value-addition in wheat products, but also protect growers and consumers’ interest.”

He urged upon the CBR to immediately issue the SRO and said that as the new wheat crop had already started arriving from lower Sindh it would help traders take full advantage and earn higher foreign exchange for the country.

Referring to a meeting held recently with the federal secretary of the ministry of food, agriculture and livestock, Mr Kandhari said the association had suggested that wheat import should be allowed throughout the year as it would ensure a balance between demand and supply and avert any crisis as was witnessed in the case of sugar.

The KFMA vice-chairman said the government decision last year to allow wheat import immensely helped stabilize flour prices in Karachi because much of the imported wheat of 800,000 tons was released by private sector exporters in the city market. As a result of this, the month of Ramazan also did not witness any wheat or flour crisis and prices remained stable.

He said the government and the State Bank had allowed banks to finance wheat procurement by the private sector, but demanded that such financing should be at lower mark-up to support growers. The cabinet decision to allow the private sector banks to provide financing for wheat procurement is valid up to January 31, 2007. He said the KFMA delegation had also requested the federal secretary to allow free movement of wheat so that higher exports could be achieved.

Mr Kandhari said that each year the government claimed to have achieved a bumper wheat crop, but usually it fell short of domestic consumption. “Even the current season production is being estimated at around 22 million tons, but so far the country has produced 18.5-19 million tons of wheat.

He said in the absence of proper storage facilities such as silos and fumigation and proper road network, around 30 per cent of the crop went to waste. He disclosed that currently the new crop from lower Sindh was being sold at Rs1,025-1,030 per 100kg, whereas in the world market prices ranged between $180 and $185 per ton. However, he said the actual impact on prices would be known when Punjab wheat would start arriving in the market.

Responding to a question, the KFMA vice-chairman said that exporters could win contracts for wheat products of up to 100,000 tons as they had already proved this in 2000-01 and 2002 when they had exported a sizable quantity of products on harvesting bumper wheat crop.

“We captured sizeable export markets at that time but failed to maintain the supply and lost them, but now we are striving hard and can recapture these markets if the government allows free trade in wheat,” he maintained.

He said Karachi’s demand for around 125,000 tons of wheat per month could be easily met if free imports were allowed.