Additional wheat stocks exports: provinces, Passco begin to sign agreement

The provinces and Pakistan Agriculture Storage and Services Corporation (PASSCO) who have been holding Rs 195.740 billion wheat stocks started signing agreement for export of additional stocks, it was leant. Sources said Rs 195.740 billion stuck up on account of 6.757 million tons of wheat being held by the provinces and PASSCO has created procurement and storage problems in 2011.
To clear additional stock additional from strategic reserves, the Punjab government has singed agreements with eleven parties for export of 1.1 million-ton wheat and four parties have started lifting the stocks. Two ships have sailed for Bangladesh and another four are being loaded.
Similarly, Sindh province has also signed agreement with twelve parties for three lac ton wheat export and twenty eight additional parties are in the process of executing agreements of five lac ton with the food department. The PASSCO is also holding negotiation with eight parties for export of three lac tons.
An official in the finance Ministry said that international donors may have reservation on Economic Co-ordination Committee of the Cabinet (ECC) decision that federal government would give Rs 164.798 billion bank guarantee for procurement of 6.57 million tons of wheat in 2011. The international donors main concern was borrowing money from banks for commodity operation may result in squeezing the private sector credit. A significant amount is already blocked on account of commodity operation pertaining to sugar and wheat.
The current position is that Punjab province is holding 6.647 million wheat stocks worth Rs 132.882 billion and Sindh 1.1737 million wheat stocks worth Rs 20.598 billion. The wheat stock with Khyber Pakhtunkhwa is 0.476 million worth Rs 4.571 billion. Balochistan and PASSCO are having 0.138 million tons and 1.940 million tons with Rs Rs 1.852 billion and Rs 35.846 billion respectively. The per ton wheat price in Punjab and Khyber Pakhtunkhwa is Rs 28750 inclusive of all the incidental charges while price of per ton wheat in Sindh is Rs 28530. The price of per ton wheat in Balochistan is Rs 26700 and to PASSCO it was costing per ton Rs 30250.
The ECC was recently informed that international price of wheat which was relatively low compared to domestic market has started to increase after December 2010. So this was the best time to dispose of 2.6 million ton over and above the strategic reserves for the country. The meeting was informed that international price of per tons wheat was 366 dollar in January 2011, 2 dollar more than the domestic price of wheat.