Pakistan. Traders finalise 0.5 million tons deal


Traders have finalised deals for import of some 0.5 million tons of wheat, as the domestic market is facing shortage of the commodity and world prices are on lower side. Market sources told Business Recorder on Saturday that first wheat consignment, imported by flour millers, is likely to reach just after Eid. "Some 30,000 to 32,000 tons of wheat has booked at $290 per ton and is being imported from Russia to meet the domestic demand," they added.

The country had missed its wheat production target by 3-4 percent this year and it produced about 23.2 million tons of wheat during 2013 against the target of 25 million tons set by the federal government.

The shortfall in the wheat production has resulted in higher commodity price in the domestic market and wheat grain price has reached Rs 3,560 per 100-kilogram bag up from Rs 2,800 per bag in local market. The domestic wheat grain price are even higher than the world market as well as wheat support price of Rs 3,000 per 100-kg bag announced by the government to provide a better price to the farmers.

Amid anticipated wheat shortage, the traders and millers have started import of wheat from world market to avoid any wheat crisis in the local market and make sure cheap flour products in the country. Presently, Russian wheat is available at $280-290 per ton in the world market and imported commodity will cost Rs 3,300 to Rs 3,350 per 100-kg bag compared to Rs 3,560 per 100-kg bag of locally produced wheat.

Sources said that Pakistani traders and millers were in contact with foreign buyers and closely monitoring the world wheat market. Pakistani traders prefer import of Russian and Ukraine wheat instead of Australian as Russian and Ukraine''s commodity prices are lower in the world market, compared to Australian wheat.

"Russian and Ukraine''s commodity is available at $280-290 per ton C&F. While, minimum price of Australian wheat in the world market is $325-330 per ton and best quality Australian wheat is not available less than $350 per tons," said a trader, who is closely monitoring the international market.

"The import at higher price is not viable for the Pakistani traders and millers therefore they are making deals for the import of Russian wheat, which quality is equal to Pakistani commodity," he added.

As per initial reports so far Pakistani traders and millers have finalised deals for the import of 0.5 million tons of wheat, which will be arrived till December this year," he added.

He said that cost of imported commodity can be reduced through withdrawal of 5 percent withholding tax on import stage. "Delay announcement of increase in wheat support price has resulted in shortfall in harvesting this year," he added.

"As per initial estimates, Pakistan will be required to import some 0.7-0.8 million tons of wheat from international market to fulfil the domestic demand," said Chuadhry Ansar Javed, chairman Pakistan Flour Mills Association Sindh Zone.

He said that for the last few months millers were indicating a wheat crisis in the country and had been calling for a ban on wheat export. However, despite millers'' concerns, the government did not take any action, he added.