KARACHI: Wheat exports swelled to 1.120 million tonnes in July-May 2017-18 as against just 3,937 tonnes in the same period last year. Market players are hopeful that the target of 1.4m tonnes by sea route will be achieved by end of this fiscal year.

Export earnings from wheat in the first 11 months of FY18 surged to $222 million compared to just $1m in July-May period of 2016-17.Wheat is being exported to Bangladesh, Indonesia, Vietnam, Dubai, Muscat, Oman, etc. at a price of $185-200 per tonne.

The government in December allowed exports of 2m tonnes of wheat and wheat products before June 30 to clear carryover stocks as new crop finds way into the market. The government is providing an export subsidy of $120 per tonne by land and $169 per tonne by sea routes.

Pakistan resumed its wheat exports from February — after a gap of five months — by sending 65,649 tonnes that earned $12.5m compared to nil foreign sales of the commodity since September 2017.

Attractive prices in world markets coupled with handsome subsidies boosted exports of the commodity while around 15-16pc rupee devaluation against the dollar in the last six months further made shipments competitive.

Exports of the commodity continued to break single-month records. Highest-ever shipments were recorded in April with 486,828 tonnes ($96.4m), 326,133 tonnes ($66m) in May and 241,522 tonnes ($47m) in March.

Local prices rising

The local rates of wheat are crawling up with the surging export of wheat. For example, in March, the 100kg wheat bag was available at Rs2,975 which rose to Rs3,050 in April. In March the rate of flour no.2.5 was Rs1,800 while fine and maida rate fixed by the millers were Rs1,875 per 50 kg bag.

In April the price of flour no.2.5 stood at Rs1,675 while the rate of fine and maida were fixed at Rs 1,750 per 50 kg bag.

Now the open market rate of 100kg wheat bag is Rs3,375 which was Rs3,125 in May. Due to rising trend in wheat price, the millers slightly pushed up price of flour no.2.5 at Rs1,775 per 50 kg bag, up by Rs25 per 50 kg bag while the rate of fine flour and maida were fixed at Rs1,925, up by Rs75.

As a result, the price of Ashrafi and Bake Parlour 10kg flour bag price went up by Rs10-20 per bag.

All Pakistan Flour Mills Association Chairman Chaudhry Ansar Jawed said increase in flour price has nothing to do with rising wheat exports as new crop arrival had earlier resulted in decline in wheat price few months back followed by drop in flour prices. Now the stocks are being consumed and finding way into the godowns making the prices slightly under pressure as per market practice.

He said after completing wheat export target there is a need to stop wheat exports despite surplus stocks of 4.5 million tonnes of last year’s carryover stocks.

“Pakistan should keep a reasonable wheat stocks in hand to avert any crisis as issues of water shortage still loom,” he said, adding the exports of wheat related products should continue. Country’s wheat crop this year is a bit lower than last two years.

Wheat export target of 600,000 tonnes via land route may not be achieved as Afghanistan is getting cheaper wheat from Uzbekistan and Kazakhastan, he added.

Sindh Food Department is reported to have procured approximately 1.3 million tonnes of wheat from the growers from the current crop while Punjab Food Department has lifted 3.8m tonnes.

Published in Dawn, June 22nd, 2018