KARACHI, Dec 28: The government decision on Wednesday to export half a million tons of wheat will fetch hardly $120 to $150 million but will ensure Punjab farmers a minimum officially fixed procurement price of Rs430 for 40-kg on harvesting of a bumper wheat crop next spring.

“The government delayed wheat export decision by at least two months,” Bilal Sufi, a millers’ leader in Punjab, told Dawn by telephone on Thursday. The best time to export wheat was in October when there was worldwide demand. “Most of the deficit countries have booked wheat import orders and Bangladesh is the only country that is now looking for buying a few lakh tons of wheat,” he said.

Delay in government decision to export wheat came because of advice by the State Bank of Pakistan given in its annual report for the year 2005-06 released early December. In this report the State Bank warned the government of wheat prices going up in the market even after harvesting a bumper crop because of the market manipulation, speculations and hoardings by the profiteers.

The State Bank advised the government to hold back on wheat export till the time it ensures procurement and stocking of enough quantity of wheat which can be used to counter the manipulations of speculators in the market.

Traders say that the Pakistan wheat can attract a price of $240-$260 per ton in the international market and the export would fetch anywhere from $120 million to $150 million. Punjab has substantial stocks of wheat from the previous crop and farmers are gearing up to harvest a bumper crop of 17 top 18 million tons of wheat next spring.

“But the government has not withdrawn 15 per cent duty on wheat export,” complained a local trader. He said the continuation of this levy on wheat export would discourage traders from seeking orders from abroad.

Punjab maintains the highest quantity of official wheat stocks and is expected to work out wheat export modalities with the traders very soon. Traders say that with a 15 per cent levy plus the transportation cost from Punjab to port in Karachi makes the wheat export a difficult proposal.

But then no sooner, the Economic Coordination Committee of the Cabinet decided on Wednesday to allow half a million tons of wheat export, the global food operators have started making enquiries of the stocks and quality. A local trader received three prompt enquiries and is responding back the queries.

Traders say that after finalisation of modalities at the federal and provincial level, the booking of export order should not take more than a week and shipment should begin sometimes in February when wheat from fresh crop will start trickling in lower Sindh.

With 1.5 million tons surplus in the carryover stocks, the farmers expect to harvest 22 million tons plus crop next spring from which the government plans to procure more than five million tons for official stocks.

But international prices of wheat are high and there is a lurking fear that speculators, hoarders and profiteers may try to exploit the situation. The government too will monitor the situation closely as elections are round the corner.