LAHORE, May 14: The Punjab Food Department is daily absorbing 125,000 tons of wheat but still it is the private sector that is mainly helping the farmers and the department clear the glut in the province.

With international wheat price still hovering over $336 per ton, exporters are buying massive quantities especially in southern part and saving the price crash below Rs850 per ton which otherwise, given the crop size, was a distinct possibility.

Owing to exporters’ buying, wheat arrival at the procurement centres of the Food Department has already dropped in the districts of Bahawalpur, Rahim Yar Khan, Dera Ghazi Khan, Layyah and Bhakkar.

“The exporters are buying wheat mainly from bordering districts of Punjab because it costs them much less to transport it to Karachi for export,” claimed an official of the Food Department. So far, he said, the exporters had not touched Multan and below because of the price factor.

In these areas the farmers were still getting gunny bags for around 85,000 tons a day. Once the exporters’ shopping spree reached these areas, the department would get some relief, he said.

According to exporters, currently three ships are docked at the Karachi port and being loaded with wheat for export. These ships may take 125,000 to 150,000 tons of wheat and ease the pressure on domestic market.

The second biggest export taking place is to Afghanistan. In areas like Mandi Bahauddin, Sargodha and even down to Gujranwala to some extent, Afghans are purchasing heavy quantities. All of it is being taken to Afghanistan and taking pressure off the Punjab market, they claim.

“The department had purchased 2.12 million tons of wheat by Friday night,” said Secretary Food Irfan Elahi. By Saturday night, the figure could have gone to 2.27 million tons.

He said the department hoped that arrival would start declining in the next four to five days and sustain to a level of 85,000 tons -- the quantity for which gunny bags were being provided now for the next few days.

Going beyond the target of 3.5 million tons would depend on the private sector. If the private buyer maintained its level of purchase, which in all probability it would because of declining supplies, the department might not need to go beyond 3.5 million tons. However, it had made the backup arrangements for four million tons.

If the private sector slowed down, he said, the Food Department would determine its course of action. About the price, the millers from Lahore claim that the price calculation has become confusing this season because of weather effects on the crop.

At present, there are three different prices in the market; one for discoloured wheat, second for partially discoloured and third for normal wheat.

Discoloured wheat is being sold at Rs850 per maund and going mainly to the poultry feed mills. Partially discoloured wheat is going mainly to the Food Department because they hardly have any mechanism to check the quality of entire arrival.

The millers and exporters are getting quality wheat but around Rs880 to Rs900 per maund, they say and adds: “If an exporter purchases wheat from the field, he pays some Rs20 per maund less compared to the one bought from the market.

“The farmers are accepting comparatively less price because of increase in per-acre yield. Massive increase in per-acre yield has allowed the farmers to compromise on the price without reduction in total income.”