KARACHI, May 31: Pakistan is likely to lift a two-and-a-half-year ban on wheat exports next month and will be eyeing the Indian market to sell its grain after a good harvest this year, an official said on Wednesday.

Mohammd Ismail Qureshi, permanent secretary at the food and agriculture ministry, said the latest estimates showed the country has a better-than-expected harvest of 21.7 million tons from the current 2006-07 crop.

The agriculture ministry in April estimated 20.5 million tons of output. Total annual domestic needs are 22 million tons.

“After a new estimate on the crop size, we would definitely have an exportable surplus of over 1.5 million tons as we also have carryover stocks of 2.1 million tons from last year’s crop,” Mr Qureshi told Reuters from Islamabad.

“We are closely monitoring wheat demand in the international markets, including India, and will take a decision on exports in June...most likely after the budget.”

He said the government was also considering an Indian proposal to barter their sugar for Pakistani wheat. “We are looking into all possibilities for wheat trade with India, and government-to-government barter is one of the options,” he added.

“We can also participate in (Indian) tenders, but all will depend on the market conditions.”

In 2004, Pakistan officially banned wheat exports and withdrew its export refund policy, under which traders got a maximum of Rs2,500 per ton on shipment of cargoes to cover transport and other costs.

Mr Qureshi said the government was also keen to resume supplies to Afghanistan and the Middle East, where it could sell at least 1.0 million tons of quality grain.

A senior official at the TCP said the Punjab government had approached the grain agency for wheat exports to India.

“The Punjab government has informed us that it wants to export wheat to India through a tender and also through government-to-government trade,” said the official, who asked not to be named.

“We are waiting for the government decision on allowing exports.”

Another senior official at the ministry of food and agriculture said a good maize crop of over 3.5 million tons this season had also increased availability of grain in the local market, resulting in less domestic demand for wheat.

“The livestock and feed industry have consumed less wheat this season because of higher maize output,” said wheat commissioner Qadir Bux Baluch.