KARACHI: Hasty buying of wheat for export market has created panic in the commodity market with wheat price registering an increase of Rs 1,250 per ton in the domestic market during a week. Market sources told Business Recorder on Wednesday that commodity exporters, expecting huge orders from abroad, are aggressively procuring wheat to fulfil their export requirements, as commodity prices in the world market are steadily on the rise.
Pakistan's wheat export had declined over the past few months because of low prices in the world markets, but rising wheat prices abroad had opened up new venues for export of Pakistani commodity. "The abrupt surge in buying in the wake of rising wheat prices in the world market has created a panic in the domestic commodity market, resulting in a massive increase in wheat prices", they added.
Wheat prices surged by Rs 1,250 per ton over the past week, as exporters and market movers went on a buying spree in the local market. With the current rise, wheat is being sold at Rs 27,500-27,750 per ton against a price of Rs 26,500 per ton a week ago. Now, a 100-kilogram bag of wheat is available at Rs 2.
Flour millers have already announced to increase milled flour price by Rs 2 per kilogram with economy flour, called 'Dhai Number Atta', being sold in the market at Rs 320 per 10kg bag. Previously, it was being sold at Rs 300. Market sources believe the price of wheat flour will increase after Ramazan.
Currently, the Sindh government is providing a subsidy on wheat to mills aimed at facilitating the masses. Wheat prices in the world market crossed $300 per ton mark after a long gap and export at this price level was viable for Pakistani exporters, they said. In addition, exporters also acquired warehouses in Korangi and Pipri areas to store their newly-acquired wheat stocks, sources said.
Although the country had a bumper wheat crop this year and the market stocks were estimated at millions of tons, but the exporters' extraordinary buying spree could affect the price and the availability of wheat in the domestic market. Domestic stocks, maintained by various government agencies, are said to be in the range of more than seven million tons.
At present, Punjab Food Department has a stock of 4.5 million tons of wheat, about 2.7 million tons are stored by Pakistan Storage and Services Corporation (Passco) and the Sindh Food Department holds about a million tons of wheat stocks. However, market sources said that mismanagement and irregular buying might disturb the actual calculation of wheat availability, resulting in higher prices and shortages in the domestic market. Urging the federal government and Economic Co-ordination Committee (ECC) of the cabinet to take notice of massive wheat procurement drive and re-evaluate production statistics to avoid any shortage in the domestic market.