HAMBURG: A tender to sell and export 100,000 tonnes of wheat from a state agency in Pakistan attracted offers with high prices which could allow the wheat to be exported without subsidies, European traders said on Monday.

The tender from the Pakistan Agricultural Storage and Services Corporation (PASSCO) closed on Jan. 11. It was issued under a new Pakistani government export programme to reduce high wheat inventories with possible export subsidies.

"Some 12 offers were above the minimum price target of 32,500 rupees ($233) a tonne ex inland store which would mean the wheat could be sold and exported without a state subsidy," one European trader said.

"When other cargo handling and inland transport costs are included this would probably mean an fob price (port export price) of about $250 a tonne."

Pakistan's government on Nov. 20 approved the export of up to 500,000 tonnes of subsidised wheat to reduce large local supplies.

Pakistan's export programme is being watched closely by grain traders as large additional volumes of wheat can be rapidly placed on world markets.

The 12 trading companies from Pakistan who offered above 32,500 rupees sought a total of 255,000 tonnes and were thought to be mainly offering on behalf of grain traders and buyers outside Pakistan, traders said.

The highest offer was 32,759 rupees for 10,000 tonnes.

Traders expect the wheat to be sold to importers including Sri Lanka, the United Arab Emirates, Oman and Indonesia.

"I think 100,000 tonnes will be awarded in the tender without a subsidy," another trader said. "Although the Pakistani government indicated that up to 500,000 tonnes could be exported in the current programme, the 100,000 tonne tender is the only one issued so far."

In early 2018 Pakistan also approved the export of wheat to reduce large local supplies which resulted in a series of large sales by export companies to Asian and Middle Eastern importing countries.

The PASSCO tender offers wheat in bags described as fair to average quality, traders said. Buyers of the wheat must remove the volume bought within 30 days of an agreement being signed, they said.

The wheat is for export by sea ports only, not for internal use or land export to Pakistan's neighbours.