May 07, 2007	Monday	Rabi-us-Sani 19, 1428

LAHORE, May 6: Sluggish buying activity on the part of flour millers in Punjab may force the Punjab and federal governments to increase their targets in the next few days.

Ready to go for more purchases if asked, officials of the Pakistan Storage and Services Corporation (Passco) and Food Department however do not foresee such a probability.

According to them, the federal permission to export 500,000 tons is attracting exporters to the market. “Their purchases may keep the wheat rate above the official support price,” they hope.

Food Minister Hussain Jehania Gardezi says that the department has procured 1.2 million tons in the first 15 days of the purchase drive. “It is 200,000 tons more than the corresponding period last year. The daily wheat arrivals now have crossed 100,000 tons. The trend is expected to hold for another two weeks before it starts receding.”

He says official procurement targets are not being met in R. Y Khan due to heavy purchases by buyers from Sindh. “The price trend in Gujranwala and other up-country destinations also indicates purchases from the NWFP. The price in these areas is hovering around Rs440 per 40kg.”

The minister agreed that purchases by the millers were slower than the last few years, perhaps due to high mark-up rates (as mills need loans from banks to make bulk purchases). But the deficit, he said, could be met by purchases from other provinces and potential exporters.

“High mark-up rate is keeping the millers away from wheat purchase,” says Haji Muhammad Ibrahim of the Pakistan Flour Millers Association (PFMA).

Meanwhile, the Pakistan Storage and Services Corporation (Passco) has also procured 700,000 tons of wheat till Saturday night, with daily arrivals touching 60,000 tons.