Pakistan will likely produce more wheat than the government's target of 25 million tonnes this year, and the nation may export wheat flour to Afghanistan and the Middle East, a senior official said on Thursday. "There is no fear of any shortfall. It should meet our requirement, we should have some surplus," Muhammad Saeed, chairman of the Trading Corp of Pakistan, told Reuters.
"We are looking into exports. We will do value addition and send wheat flour to Afghanistan. Depending on the market conditions, we may export to the Middle East." Pakistan produced 21.8 million tonnes of wheat in the 2007/08 after the area under cultivation fell 2.6 percent against a target area of 21 million acres (8.49 million hectares), and the government had to import wheat to cover the shortfall.
Pakistan consumes about 22 million tonnes of wheat a year while nearly 1 million tonnes finds its way into neighbouring Afghanistan and Iran, traders say. Saeed said the country had sufficient wheat stocks and the government had yet to decide on a tender of around 250,000 tonnes of US wheat, which according to international traders received only one bid earlier this month. "We have sent our proposal to the government and it will take a decision," he said by phone from Karachi. "Wheat stocks are quite normal, 60,000 tonnes is lying at the ports and about 200,000 tonnes is scheduled to arrive by the end of this month or in the first week of March."
TCP issued the tender in December in conjunction with the US government offering to guarantee 98 percent of the purchase price, up to $48 million. But Cargill Inc [CARG.UL] submitted the sole bid at $237.88 a tonne free-on-board (FOB), which included a substantial risk premium to do business with the financially strapped nation, traders say.