Despite rebate incentive, the wheat export policy has failed to attract the exporters as only one deal got materialised since its announcement. Although, Punjab and Sindh food department have received a number of queries for the procurement of wheat for export purposes, however so far only one deal has been signed for a quantity of 3,000 tons, sources told Business Recorder on Monday.
On the recommendations of the provincial food department, the Economic Co-ordination Committee (ECC) of the Cabinet, in its meeting on January 23, 2015, allowed some 1.2 million tons of surplus wheat in order to offload previous stocks and procure new wheat grains from fresh crop, which is expected to arrive in April. While banning wheat import, the ECC permitted the Punjab food department to export 0.8 million tons and allocated Sindh a wheat export quota of 0.4 million tons. As the domestic wheat prices are higher than international market, the federal government also announced a rebate of $55 per ton for Punjab and $45 per ton on wheat export from Sindh.
After getting a green signal from the federal government both food departments announced their wheat export policies to attract traders/exporters aimed to offload their stocks and retire bank loan obtained for wheat procurement. However, response from the traders is very poor and despite an attraction of rebate on export, only one export deal for export of 3,000 tons commodity has been signed between a private party and the Punjab food department. Sources said the private firm has started lifting wheat from the godowns of Punjab food and it is likely to start export in next few days.
Sindh food department is still looking for export orders as several exporters have approached, however not a single deal has been matured. “We announced wheat export policy a week earlier and received inquiries for procurement of 150,000 tons of commodity for export,” said an official of Sindh food department. However, he confirmed that, not a single deal has been finalised so far. He said the declining trend of wheat prices in the world market has created difficulties for Pakistani traders and despite an attractive export policy they are reluctant to procure wheat for export purposes.
Sindh food department will provide wheat for export at Rs 28,000 per ton, while $45 per ton rebate will be paid by State Bank of Pakistan (SBP) directly to exporters on maturity of Letter of Credit. As per policy, exporters will be required to export the commodity in 45 days of its date of lifting or before March 31, 2015, (whichever comes earlier), he added.
Traders are of the view that the federal and provincial committees have announced wheat export policy without consultation of traders, which resulted in poor response from exporters. They said that $45 per tons rebate is much lower and export with this rebate is not viable for the exporters. Exporters also fear the delay in payment of rebate. A government, which is facing serious cash flow issues and doesn’t have amount for petrol import, how will it manage payment of rebate, they questioned.
Traders said Pakistan’s wheat export price is some $260 FoB, while Australia is exporting the commodity at $245 per ton C&F. They have suggested that instead of export, the government should announce its local sale at a uniform rate of Rs 27 per kilogramme aimed at providing some relief to domestic consumers.
(Source – http://www.blackseagrain.net/novosti/pakistan-wheat-export-rebate-incentive-fails-to-evoke-enthusiasm)