Wheat imports push down prices


Karachi’s ports are flooded with over half a dozen vessels carrying wheat imported by the government and private sector as Pakistan has purchased over two million tons in the last five months out of the target of three million tons for the current fiscal year.

In line with the government strategy, the imports have helped reduce wheat and flour (quality No 2.5) prices in wholesale and retail markets in recent months. The development has also helped to ease inflationary pressure in the country.

“We sold imported wheat at Rs45.50-46 per kg to flour mills today (Wednesday) compared to over Rs52 about four to five months ago,” Cereal Association of Pakistan Founder and Chairman Muzammil Rauf Chappal told The Express Tribune.

“We either sold wheat at no profit or at a small loss in the past couple of days due to the flooding of markets with the imported grain,” said Chappal, who is also an importer of the commodity.

A dealer at Pakistan’s largest wholesale market, Jodia Bazaar, said the price of imported wheat had dropped to Rs47 per kg from the peak of Rs50 in the current season. The price of locally produced grain has decreased to Rs48 per kg compared to the high of Rs53 four to five months ago.

The price of flour stood stable at around Rs43 per kg in Punjab and in the range of Rs57-64 per kg in other parts of the country, including Sindh, Balochistan and Khyber-Pakhtunkhwa, reported the Pakistan Bureau of Statistics (PBS).

“The outlook suggests that prices may go down further ahead of the arrival of new local crop in markets from February onwards,” the dealer said.

Chappal said wholesale markets were oversupplied with wheat due to a change in the government import policy. “Initially (in July), the government asked the private sector to import wheat and gave assurances that it would not import the grain itself. Later, it started importing the commodity as well,” he said.

The government took a unilateral decision on the import of wheat. “Private sector should be taken on board while making import and export decisions,” he stressed.

The government should allow the private sector to import and export all the grains and commodities throughout the year, going forward, he added.

State-owned Trading Corporation of Pakistan (TCP) reported the berthing of two vessels carrying imported wheat at Karachi Port on Wednesday.

Vessel Star Cleo carrying 53,061 tons of imported wheat and vessel CIC Epso carrying 66,000 tons of wheat for the TCP were berthed at Karachi Port on Wednesday, according to the TCP.

“With the arrival of these vessels, a total quantity of 573,711 tons of wheat has so far been imported through the TCP (this fiscal year),” the state-owned entity reported.

“The latest imported wheat will be handed over to the provincial government of Punjab,” a source revealed.

Besides, the private sector has imported 1.4 million tons through over 20 vessels since August. “We are close to meeting the target of importing 1.5 million tons. One or two vessels are left that will arrive at ports for the private sector,” Chappal added.

Ports are facing congestion with the berthing of some ships, some others are waiting to be berthed and some others are anchored in open sea. “We (private sector) are paying demurrages worth $22,000-25,000 a day on our two ships standing in the queue.”

Published in The Express Tribune, December 10th, 2020.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.

Source: tribune.com.pk