Wheat stocks hit 5.5m tonnes

As the new wheat harvest nears in both Sindh and Punjab, the country already has over five million tonnes in stocks.

Of the total wheat stocks, Punjab holds 3.5m tonnes and the Pakistan Agriculture Storage and Services Corporation (Passco) 1.5-1.6m tonnes.

Sindh has 500,000 tonnes of wheat stocks, said Pakistan Flour Mills Association (PFMA)’s Sindh Chairman Saman Mal.

The new Sindh crop will find its way into the market after March 10, followed by Punjab crop after April 15.

Market reports suggest Pakistan is set to harvest a wheat crop of 25m tonnes this season as favourable weather and high procurement price lured growers to produce more.

Another reason behind huge stocks is floundering wheat exports as prices in the world market remain under pressure. Besides, India has taken over the Afghanistan market from Pakistan, causing a glut of wheat here, the PFMA chairman said.

International wheat prices are around Rs2,200-2,300 per 100 kilogram and the rates still do not become feasible even after adding subsidy. By contrast, the Sindh government is supplying wheat to flour millers at Rs3,340 per 100kg bag.

Against this backdrop, there is no way in sight to dispose of last year’s wheat stocks. “We asked the Sindh government a few months ago to reduce wheat prices so that consumers could benefit from cheap flour, but it didn’t pay heed,” Mr Mal said. “Sindh should cut prices to boost provincial consumption.”

The PFMA chief said the government did not consider global trend while fixing procurement price at Rs1,350 per 40kg.

As demand for flour was already normal, around 40 per cent of 200 mills in Sindh were not operating, he said.

In January, the federal government set wheat export target of 1.2m tonnes by offering transport rebate from $45-55 per tonne. Despite extending date for exports, the aim to facilitate millers as well as to earn foreign exchange did not materialise.

Punjab was allowed to export 800,000 tonnes with a transport rebate of $55 per tonne, while Sindh was tasked 400,000 tonnes with a rebate of $45.

According to the Pakistan Bureau of Statistics, only 247 tonnes of wheat were exported during July-December 2015-16, fetching just $66,000. The exports dropped to 10,441 tonnes ($3m) in 2014-15 from 20,037 tonnes ($7m) in 2013-14.

A leading flour miller said he had requested the officials of Sindh food ministry and food department to visit Gulf Food Festival, being organised from Feb 21-25 in Dubai, to present Pakistani wheat among foreign buyers besides analysing the world market rates. “The department should visit Turkish stalls to learn how the country sells its flour to 130 countries.”

[Source:- dawn]