LAHORE  - The Punjab as well as Sindh provinces have decided to export about 16,00,000 tons of their surplus wheat after Federal government grants a formal approval in Economic Coordination Committee (ECC) meeting to be held today after assessing fresh crop size, international prices.

The ECC meeting could not be held earlier as the Finance Minister was not available owing to the petrol crisis and other activities.

An official source in the Ministry of Food Security confided that Punjab government had been pressing the federal government for early permission of export, but the ECC meeting could not be convened owing to many reasons, so far. He said that the Punjab government had informed the ministry, a couple of days back, that the Punjab government was holding a huge stock of around 3.5 million tons much more than its needs, said official. He said that Pakistan had imported 727,687 tons of wheat costing $182.4m in July-Nov 2014 compared to 366,015 tons in 2013.

According to unconfirmed reports, the Sindh province may also export over 600,000 tons of wheat as the flour mills have asked the government to initiate global marketing to get good price, before new crop reaches market in March. The Sindh had procured 1.3 million tons of wheat from farmers. He said that against the backdrop of cheaper imported wheat available in the open market, the consumption remained low so the province might export its surplus stocks.

The ministry official further said that the provinces could initiate their own marketing keeping in view the international market prices or decide to keep the stocks with them. He said that the private traders were not willing to export wheat available with them owing to low rates abroad.

He further said that the provincial governments wanted to export surplus quantity so that it could create space for the coming crop. Though internationally wheat prices are not strong, but the provincial governments wanted to empty their godowns to create space for new crop, he held. He confessed that the appropriate time for wheat export was May-June when world prices were more than $300 per metric ton that have now reduced to around $250 per metric ton, the official told. He said that though the prices were on the rise yet the fate of surplus wheat would be decided in the ECC meeting.

Why the government of Pakistan allowed wheat imports when it had gigantic crop during 2014, the official said, it was another issue and the ECC must take notice of it. The committee should in time decide about the import or export of the crop after assessing needs, procurement and prices in the international market. The officer said that the unprecedented low price of wheat abroad would cause loss to the national kitty.

An official of the Punjab government told that the Punjab government wanted rebate of $50 per metric ton from the federation on the exported wheat so that it could meet its expenses on procurement, storage and markup etc. He said that the cost of procurement and incidental charges on one metric ton wheat was about Rs 37000 but rates of wheat in the international market are about Rs 26000 per metric ton. However, he said that the Punjab Food department sold wheat to the flour mills at Rs 1330 per maund but in the start of current year it was reduced to Rs 1280. He said that earlier, daily release of wheat was about 5000 metric ton that has been increased up to 17000-18000 metric tons.

The Sindh government has also reportedly cut official rate from Rs 3,450 per 100kg to Rs3,250 from Dec 15, 2014 to onwards to reduce wheat present in godowns.