ISLAMABAD, Nov 17: With increasing number of complaints from abroad about the public sector wheat export, the government is considering to allow the private sector to avail State Bank of Pakistan’s Export Finance Scheme (EFS) for exporting wheat, official sources told Dawn.

The proposal has come from a committee comprising the Export Promotion Bureau (EPB) and the State Bank of Pakistan (SBP) and has support of the commerce ministry. The proposal is part of a new strategy that also includes wheat grading and improvement of varieties.

Iraq had recently complained that mud contents were detected in wheat bags exported by the Trading Corporation of Pakistan (TCP). “But don’t misunderstand it with cancellation of orders. They have lodged a complaint but export orders are intact”, a senior government official in the agriculture ministry said.

The finance ministry is reported to have some reservations on inclusion of wheat in the export finance scheme. It believed that the government was already providing concessionary finance at 12 per cent interest rate to institutions like Passco, food departments and the TCP and if the export finance is granted to wheat it would be a duplication.

Official sources said that it has been decided that wheat grading should be introduced so that maximum price could be secured through improved quality besides increase and improvement of various varieties.

The government, said the sources, has decided in principle not to continue with ‘spoon-feeding’ to the farmers through support prices but let them compete through market tools like increased storage capacity.

In the absence of sufficient godowns, support price practically become ‘punishment price’ in the post-harvest situation instead of improving farmer’s bargaining position through availability of storages.

The agriculture ministry has, however, contended that private sector did not procure wheat from the food departments and Passco and instead used open market for the purpose because of lower rates.

If the export facility is extended to the private sector, it would be able to increase wheat export. The officials said that around 100,000 tons of wheat has been affected by the fungus at Port Qasim and it was not yet sure how much of that stock would go waste.

This was again because the millers were buying wheat from the open markets at lower rates instead of food departments despite a recent persuasions by the Sindh governor to purchase wheat from food departments.

Official sources said that commerce ministry was against any support price for wheat as it believed it would not be competitive in the international market because of tough competition and dumping by countries like Argentine, America and Australia at almost 50 per cent prices.

Meanwhile, the Sindh government has informed the federal government that it would not be able to sell wheat at 12 per cent concessionary rates and asked the government to increase the repayment period from six months to one year.