Pakistan, which this week relaxed terms of tenders for importing 610,000 tons wheat to ensure wider participation, is likely to buy major volumes to build stocks and rein in prices.
The Trading Corporation of Pakistan (TCP) put the closing date for the tenders until January 16, reduced the amount of white wheat sought due to sky-high prices, and said it would accept grain of all origins.
Demand for wheat has surfaced in South Asia in the new year with India, Pakistan and Bangladesh scouting global markets for costly imports to quickly augment stocks hit by bad weather and stretched by growing demand. Traders in Karachi said plenty of wheat would be offered for Pakistan's tender, but prices would be high in line with global trends.
"By removing certain restrictions, Pakistan government has shown flexibility to get the desired quantity of wheat," Hamid Garib, president of Wheat Traders' Association of Pakistan, told Reuters by telephone from Karachi. "Personally, there is no need for imports at this point of time; Pakistan has sufficient food stocks," he said.
"There is no reason for government to panic, but they don't want to take a chance," he added. US grain traders said Pakistan granted more time and changed the mixture of wheat sought after seeing how much South Korea paid for US soft white wheat in tenders this week.
"For the convenience of the bidders, it is decided that the date of opening of the international tenders for purchase of 460,000 tons red and 150,000 tons white wheat has been extended to Wednesday, January 16, instead of January 12," the TCP said. "The other terms and conditions of both tenders will remain unchanged," it added.
Pakistan is seeking wheat for shipment by February 25, traders said. Bids will now be opened on January 16, with results expected on January 17. Pakistan had earlier tendered for 300,000 tons white wheat and 310,000 tons winter wheat. It invited bids on the white wheat only from the United States, Canada and Australia, traders said.
"The offers will be good because the tender has now been opened up for all origins," said Najeeb Balagamwala, chief executive officer of Pakistan's Sea Trade Group, which also deals in cement and coal trade. On Tuesday, South Korean flour millers bought 3,300 tons soft white wheat for $514.28 per ton fob for shipment April 10 to May 10.
Officials say it has received 150,000 tonnes and is expecting further shipments in January and February. Garib said domestic prices of wheat were high because of a doubling in global rates in 2007. Pakistan had enough stocks to meet demand until March, when the next harvest was due.
Balagamwala said Pakistan's new wheat crop was expected to be around 21.8 million tons, down from around 22.2 million tons in 2007. Pakistan annually consumes about 22 million tons wheat while nearly a million tons finds its way to Afghanistan and Iran, traders added.