LAHORE, May 28: The federal government has decided in principle to export wheat this year and will determine how much it will export by the middle of June when Punjab declares its stock position.

According to sources in the ministry of food, agriculture and livestock, the decision has been taken in view of the fairly robust carry-over stock that the country now had: around 20 million tons, 1.3 million tons with the Punjab Food Department and over 700,000 tons with the Pakistan Agriculture Supply and Services Corporation (Passco).

Even after maintaining a strategic reserve of around one million tons, the country will still have some one million tons of wheat, they said. About the potential export market, they said that it would most probably be India. India did not have a healthy crop this year and has already floated an international tender of 3.5 million tons.

The Indians have also offered barter trade: sugar in exchange of wheat. The decision would mature by mid-June when Punjab, which is now at the fag end of a procurement campaign, declares its final stock position.

About fears of exporting wheat at a cheap rate now and importing it at a higher price later, they said that precisely for this reason, the federal government was waiting for Punjab to come up with its final position. The Punjab’s procurement campaign is expected to terminate at around 2.5 million tons. At present it has 2.34 million tons and crop arrival has come down to 25,000 tons daily.

After taking into account last year’s carryover of 1.3 million tons, it would have 3.8 million tons. Its total releases over the year have not gone beyond 2.8 million tons, thus leaving an extra stock of around one million tons, they said.

The federal government also has to decide if the Punjab has to maintain buffer stocks for the entire country or only for itself.

In case of former, it may be told to keep one million tons. But in case of the latter, it claims that it needs only up to 400,000 tons, leaving a margin of 600,000 tons of export. This is a policy decision that the federal government would have to take when the picture became clearer. At present, different parts of these pictures are falling in place, he said.