Pakistan wheat surplus to cool imports this year
LONDON - A wheat surplus in Pakistan is likely to mean little appetite for imports this year, although it will purchase more oilseeds due lower crop prospects, a leading local trader said.
In November last year, Pakistan imposed a 20 percent import duty on wheat to help protect local farmers from imports, leading to the cancellation of some of the import deals.
Anis Majeed, chairman of Karachi-based food commodities firm Bombi’s Group, said Pakistan was estimated to produce 25 million tonnes of wheat this year versus around 24 million tonnes last year. Domestic wheat consumption was pegged around 22-23 million tonnes, he said.
“This year, Pakistan will not make big imports because we have the crop and there is a surplus,” Majeed said on a visit to London this week.
The International Grains Council estimated Pakistan’s wheat production in the 2015-16 year at 25.0 million tonnes, versus 25.5 million tonnes in 2014-15.
In contrast, Pakistan was expected to import higher quantities of oilseeds including canola, said Majeed, who is also chairman of the wholesale grocers’ association of Karachi, which is Pakistan’s mercantile capital.
“If you calculate (oilseeds) ... altogether this year, we are expecting to import about 1.5 to 1.6 million tonnes,” he said. “Last year was a little less - about 1.2 million tonnes and our crop was better than this year.”
Majeed said Pakistan expected a good rice crop although exports were likely to be tempered by slower demand.
“Pakistan’s production is around 6.5 million tonnes annually - out of which 3.5 million tonnes we export,” he said.
“Prices have come down as the international market has come down,” he added. “Therefore, there could be a little less (exports) this year.”
Majeed said rice exporters were looking to boost sales to Iran, a major consumer of Basmati grade rice.
Iran and six world powers are seeking to overcome remaining differences with a looming self-imposed June 30 deadline to reach a deal over Tehran’s disputed nuclear programme. The timing of sanctions relief for Iran are among the disputes holding up a nuclear accord.
Majeed said there was already a border trade between Pakistan and Iran for rice - with the business handled by local merchants along the border. A nuclear deal could enable other exporters in Pakistani cities such as Karachi and Lahore expanding business.
“Iran can be good partner of Pakistani rice and trade can be increased. But there are few difficulties of the embargoes,” he said.
Majeed said a proposed wheat barter deal between Pakistan and Iran was still being discussed.
The deal, initially agreed in 2012, was to involve Tehran exporting fertiliser and iron ore to Pakistan in exchange for wheat.
“The swapping ... has not been decided as yet,” he said. “They are working on it.”
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