Govt is expected in July to allow the private sector to export wheat as a first step towards lifting a two-year-long ban, paving the way for long-awaited sales to India, a government minister said on Tuesday.
Food and Agriculture Minister Sikandar Hayat Khan Bosan said one million tonnes is likely to be offered for sale over the next four months.
"We will recommend to the ECC to lift the ban on wheat export in a meeting to be held next week," Bosan told Reuters by telephone from the central city of Multan.
Bosan said that after the ECC decision, Pakistan would approach India for wheat sales.
The Economic Co-ordination Committee (ECC) of the cabinet is the government's top economic-decision making body.
"Initially the private sector would be given the task to export wheat and in the later stage the government agencies would be involved."
Pakistani agriculture officials are evaluating a proposal to allow wheat exports since last month after reports of a better-than-expected harvest of 21.7 million tonnes from the current 2006/07 crop.
Pakistan, which annually consumes 22 million tonnes of wheat, has carryover stocks of 2.1 million tonnes from last year's crop, leaving an exportable surplus of over 1.5 million tonnes.
Bosan said the surplus wheat will have to be sold, adding, with an eye on recent Indian wheat purchases that regional markets were being watched closely.
"India is asking cargoes through sea only but our supplies will only be economically viable through land route," he added.
"After the ECC's approval, we will ask India to also allow cargoes through Wagah," he said.
But Karachi-based traders said they could not export wheat to India without the government subsidies, as prices in Pakistan were higher than world prices because of high input, storage and transportation costs.
Pakistani wheat is quoted around $173 a tonne in the domestic market.
At $35 per tonne for storage and domestic transportation and $20 for freight charges, the landed cost in India will be around $228 per tonne, traders said.
Traders said the government would have to subsidise the grain by $68 per tonne without freight to make it viable for export.
Ashfaque Hasan Khan, economic adviser to the finance ministry, said the government is assessing what it will have to do to make the trade viable.
"The high prices of our wheat are an issue and a subsidy will have to be finalised before allowing exports," he added.
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