Sindh prepares to export wheat amid price worries

As Sindh intends to export over 600,000 tonnes of wheat, flour millers have asked the government to initiate effective global marketing to get good price, before new crop finds way into the market in March.

Sindh has procured 1.3 million tonnes of wheat from the growers, but buying by flour mills have been limited against the backdrop of cheaper imported wheat available in the open market. As a result, the provincial food department still has more than one million tonnes of locally produced wheat in its stocks.

"I have asked the food department to visit Gulfood Exhibition to be held in Dubai next month in order to create awareness about the quality of local wheat among foreign buyers," said Mian Mehmoodul Hassan, chairman of the Sindh chapter of Pakistan Flour Millers Association (PFMA).

"Nobody will come here to buy our wheat and the Sindh government has to initiate international marketing," he added. Besides marketing, demand and supply situation in the international market will also play a major role.

Based on the current price, wheat exports should fetch over $250 (free on board) per tonne, but traders are looking forward to get over $300 per tonne, he said. However, "there haven't been any orders from foreign importers".

The PFMA chief recalled that the country imported wheat at $250-$290 per tonne before the government imposed a 20 per cent duty on imports in November 2014 to ensure sale of locally produced wheat and protect local farmers. Many traders cancelled their future orders as a result.

He said millers were still relying on cheap imported wheat for blending it with locally produced wheat. The Sindh government cut official rate from Rs3,450 per 100kg bag to Rs3,250 from Dec 15, 2014 to Jan 15, 2015, but the PFMA chief claimed that the millers have lifted only 25,000 tonnes so far from the provincial government. He said the open market still has unsold stocks of 200,000-250,000 tonnes of imported wheat.