KARACHI, April 4: Pakistan, facing a shortage of around one million tons of sugar, has received an Indian offer to barter wheat for the sweetener, a senior government official said on Tuesday. “India is looking for an arrangement to barter their sugar for our wheat,” Ashfaque Hasan Khan, an adviser to the finance ministry, told Reuters.

“They have not mentioned any quantity but we are considering their proposal... a decision, however, would only be taken after a final estimate on the size of our wheat crop.”

Pakistani farm officials forecast wheat output to reach 22 million tons during the 2005-06 (Oct-May) crop year. Annual domestic demand is a little over 20.8 million tons.

Agriculture officials will make a final assessment on the crop size in the second week of May.

Mr Khan said recent rains in Punjab have brightened prospects of a bumper harvest this season.

“From Indian proposal, it seems they need huge quantity of wheat,” Mr Khan said. “The final details can only be finalized, if our harvest meets the target.”

Another agriculture ministry official said the ministry estimated that the country would have an exportable surplus of at least 1.5 million tons of wheat this season. “We need some market for our surplus harvest otherwise the farmer would not get good prices,” the official said on condition of anonymity.

In May 2004, Pakistan banned wheat exports in the face of lower output and a shortage to meet domestic demand.

The official said the government would purchase five million tons of wheat from the farmers in 2006, on top of the carryover stocks of 2.5 million tons held from the previous year.

“The government is more inclined to involve private traders in wheat trade, especially in procurement and storage, to give a better price to the farmers,” he added.

But industry officials said they expected a soft response from the traders because of low profit in wheat trade last season.—Reuters