KARACHI, June 4: Exporters have demanded clearance of wheat against those letters of credit received by banks till May 23, and have urged Passco and Punjab Food Department to immediately fulfill their commitments towards export contracts.
At the same time flour mills have intensified their pressure on the government to suspend wheat export for one year.
Chairman Pakistan Flour Mills Association, Sindh circle, (PFMA) Anser Jawed said that at least one year ban on wheat export will keep the prices stable as consumers are already burdened with higher prices of other kitchen items.
“In case some wheat quantity is surplus then the government should reserve it for the benefit of the end-users as nobody knows what kind of situation will prevail next year,” he said adding that every country in the world maintains huge reserves first and then think of export.
He said that the consumers had seen the benefit of ban on wheat export, which brought stability in the rates. Any decision to allow wheat export will hit the consumers in the shape of price hike. However, he did not agree that some millers had increased the rate of 10 kg fine atta bag by Rs5-10. He added that the market people, rather than the millers, had increased the rates.
On the contrary, Wheat Association of Pakistan (WAP) had sent details to Prime Minister Shaukat Aziz regarding L/Cs in hand on June 1, for the export of 687,018 tons of wheat. The WAP pointed out that the Passco and Punjab Food Department had sold 4,25,000 tons wheat solely for export purpose for which the exporters had paid over Rs450 per maund, a price higher than the minimum support price of Rs425 per maund for farmers for old crop 2006.
“We just want the government to allow export of only that quantity of wheat, which has been committed with the foreign buyers. We are not talking about future exports,” WAP senior vice-president Abdul Kalim Bakzaa said.
Giving details about some negative developments that led to wheat export ban, he said that actually transportation cost had increased by 60 per cent impacting wheat prices by three to four per cent followed by increase in wholesale rate of flour varieties.
He said exporters, who had bought wheat solely for export against firm government commitments, were now undergoing various problems, apart from losses due to holding and carrying charges, including credibility in the world market and difficulties in declaring ‘force majeure’ resulting in legal and arbitration issues with the overseas buyers.
He said that the international buyers have faced huge losses as some vessels were booked clean for Pakistani ports as they had made commitments to third parties.
Kalim urged the prime minister to convene a meeting of the stakeholders, including WAP to elicit their suggestions for wheat export policy and the future strategy. The government should also think of setting up a Wheat Board of Pakistan, he added.
