ISLAMABAD: Pakistani wheat traders are looking at Middle Eastern countries, as well as Bangladesh and Malaysia as possible destinations, after the government lifted a three-year ban on exports because of market surplus.
Pakistan, Asia’s third-largest wheat producer, in August deferred earlier plans to export two million tonnes of surplus wheat after summer floods washed away at least 725,000 tonnes of the grain and raised concerns about the next crop.
The government said this week it was lifting the ban imposed in 2007 but did not mention any limit on the quantity of exports.
Two Finance Ministry officials said one million tonnes of wheat had been allowed to be shipped by the private sector.
“The possible destinations for our wheat would be Malaysia, Bangladesh, and some Middle Eastern countries,” said Mohammad Javed Thara, a Karachi-based trader.
“Exports in bulk may not be possible because of higher domestic prices as compared to the international market, but it can go in small cargoes,” he said.
He mentioned the United Arab Emirates and Egypt as countries where wheat could be shipped, because Pakistan had sold its wheat there before the ban.
The government banned wheat exports in 2007 because of shortages and high prices in the domestic market.
The government has said it would not provide any subsidies for wheat exports.
Traders say Pakistani wheat would cost about $335 a tonne FOB (freight on board) and could make inroads at a time when freight charges in Russian and European markets normally rise because of winter.
“This is the time we should enter the international market,” said another Karachi-based trader, Johar Ali Qandhari.
Pakistani wheat stocks soared this year after a bumper crop of 23.86 million tonnes in 2009/10 added to a carryover of 4.2 million tonnes from the previous crop. Pakistan consumes about 22 million tonnes of wheat annually.
The sowing for the next crop is underway, and harvesting will begin in April. The government has set an output target of 25 million tonnes for the 2010/11 crop.
Millers and traders say total wheat stocks in the country are about 9 million tonnes and it could export more than two million tonnes.
