March 15, 2007	Thursday	Safar 25, 1428

KARACHI, March 14: Amid an indicated shortfall of five to seven per cent in the global wheat production this year that also includes an expected deficit of three to five million tons in the neighbouring India, the growers in Pakistan are all set to harvest a record bumper crop of about 22 million tons, creating good export prospects.

“Rains have so far not done any substantial damage to the wheat crop’’, Sufi Bilal, a senior leader of the millers, informed from Lahore by telephone on Wednesday, but warned that more rains could affect the crop by reducing the size of the grain.

He indicated good prospects of wheat exports from Pakistan in the coming months as reports suggest some shortfall in wheat production in Australia, Canada and India.

In India, he said the indications are that wheat production this season will be less than 70 million tons as against its demand of 73 million tons plus. Bilal is not happy with wheat export these days as international prices have crashed from a peak a few months ago.

Traders in Karachi are too exploring wheat export prospects in India and other countries, but millers want government to come out with a comprehensive policy for wheat and bakery products export that should give incentives to value-added products.

“November and December are appropriate months for export, if silos are constructed in Sindh and Punjab according to international standards to stock wheat, and if State Bank gives a proper credit policy to finance,’’ said a local trader.

For bakery products export, the government needed to carry out a market survey in UAE, Saudi Arabia and African countries.

Reports emerging from Islamabad suggest that the federal government intends to come out with a long-term wheat export policy in anticipation of a bumper crop harvest for the second consecutive season this year.

Pakistan’s domestic demand is estimated at around 20 million tons. A strategic reserve stock of one million ton that is disposable through export at the end of any season is being considered a safe option if prospects of next crop remain bright.

But with improper mechanism of crop estimation, insufficient stocking arrangements, bad roads to connect fields with markets and above-all a high cost of production, a long-term wheat export policy will always remain an elusive dream.

“The wheat is a sensitive item, and its scarcity is fraught with frightening consequences of political destablisation,’’ remarked a bureaucrat who once remained associated with the food department in Sindh government. The memories of hunger marches, protest rallies and countrywide agitations in 1997 because of wheat flour price spiral, still haunt bureaucrats. Then a few years later, the government exported some wheat in anticipation of harvesting a bumper crop and faced an acute supply and high price problem.

In the current season, the government expects to harvest 16 to 17 million tons in Punjab, 2.3 to 2.4 million tons in Sindh and two to three million tons are likely to be procured from NWFP, Azad Jammu and Kashmir and Balochistan. The Sindh is planning to procure about 0.7 million tons from growers in next few weeks.

“We are seeking a Rs7.5 billion financing from banks to launch our procurement in the next one or two seeks’’, said an official of the Sindh food department.

The banks are now asking for 10.50 per cent interest on borrowings as against 10.25 per cent in the last quarter. The Sindh food department claims to have paid back a substantial amount of Rs7 billion borrowed for procurement in the last season and officials say that hardly Rs30 million remain to be paid back.

Millers in the city complain that wheat being made available from government stocks is of inferior quality. The government storage is of substandard quality and unable to preserve the grains.

The wheat flour price did rise in the market because of what was said rising cost of electricity, but wheat price in the open market is gradually coming down.