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    Pakistan cuts into Indian wheat markets.

    Very welcome news for Pakistan's economy and farmers. We are now exporting to Afghanistan, Iraq and possibly Iran beating regional competitors.

    http://www.atimes.com/ind-pak/CF19Df01.html


    Pakistan cuts into Indian wheat markets

    By Syed Saleem Shahzad


    Pakistan's economy has taken a new turn with the country for the first time entering the wheat export market with the shipment of 35,000 tons to Iraq. This places Pakistan as a potential competitor to India in Gulf and Middle Eastern markets, which Islamabad has targeted.

    Pakistan, which until last year had to import wheat from Australia and the United States, has built up a surplus stockpile of 2 million tons following a bumper crop in 2000. The country aims to increase its export net despite drought conditions this season and losses due to farm mismanagement.

    The recent loading of the first consignment of 35,000 tons marked the beginning of a shipment of 100,000 tons of wheat to Iraq, for which full arrangements have been made to ensure quality and on-time delivery by the end of this month. In terms of a contract with the Iraqi grain board, full delivery must take place within 90 days from the date of the opening of letter of credit. The second shipment will reach Baghdad by the first week of July and the third and the final one is scheduled to land by the end of July.

    Pakistan sealed the deal for hard red winter wheat to Iraq under the "oil for food" program of the United Nations at the rate of 214 Euros per ton - or about US$196 per tonne.

    About three months ago, Pakistan's Economic Coordination Council (ECC) of the federal cabinet set a target for wheat exports of 800,000 tons. In addition to Iraq, Afghanistan and Iran were identified as potential buyers.

    There had been some conflict over the Iraq deal as Baghdad had wanted to pay only $125 per ton, against the minimum international price of about $150 a ton. By contrast, under a recent agreement signed between the government of Afghanistan and Pakistan, Afghanistan will import 250,000 tons of wheat by December 2001 at the subsidized rate of $138 per ton.

    Pakistan's wheat export targets might have to revised as a result of this season's drought which could see overall production slide by 15 to 20 percent against last year's total of 21 million tons. The country's consumption requirement is approximately 21.3 million tons.

    Nevertheless, the government is determined to continue with exports. The ECC has recently approved deregulation of wheat exports by allowing local producers to export wheat without having to obtain to a No Objection Certificate (NOC) or others permission from any government agency.

    International reports say that the recent dry weather in the wheat growing areas of Canada, Australia and China, resulting in a lower estimate for world production, will help Pakistan.

    The United States Department of Agriculture May crop report puts wheat output in the 2001-02 season at 572 million tons, down from 580 million last year and 586 million two years ago. International analysts believe there will be a likely cut in China's wheat production, as well as declines of about 1 million tons in Canada's output and possibly 1.5 million tons in Australia's production.

    However, Pakistan will not alone in the region in attempting to capitalize on this opportunity. India has raised the ceiling for wheat export by state-run firms for 2000-01 from 2 million tons to 5 million tons. However, its chances of attaining this target by the end of June are bleak due to the inferior quality of the wheat.

    India offers wheat on export markets at around $140 million a ton, which is competitive, but the quality is often poor. Indeed, Iraq chose Pakistani wheat of that from India due the the latter's inferior quality.

    Similarly, Iran has also slashed its imports of Indian wheat due to presence of a disease called "Kernal Bunt". Sources say Pakistani and Iranian authorities are negotiating to resolve price matters. If Pakistan agrees to drop to $125 per ton, Iran says it will import 300,000 tons. Pakistani authorities are now weighing up the advantages of selling the wheat at this subsidized price as a loss leader to establish its wheat credentials by entering the Iranian market for the first time.

    Pakistani authorities realize that to remain a player on world markets, they will have to maintain a sufficient stockpile to ensure they are around for the long term. Increased wheat production is therefore essential. According to experts, this can be achieved through better farm management. At present, Pakistan is the seventh-largest wheat producer, accounting for 2.73 percent of the world's wheat production from an area of 3.57 percent of the world's growing area. Wheat accounts for 37.1 percent of the country's total crop area, 65 percent of land used for food grain and 70 percent of the production, mainly grown under irrigated conditions. The plains, with their favorable topography, rich soil and good agriculture facilities have a much a greater acreage planted to wheat. The contribution of wheat in the value-added in agriculture stands at 12.5 percent and its share in the GDP is 3.1 percent. Still, Pakistan's wheat production per hectare is lower than the world's average.

    In addition, a second target is the participation of the private sector in wheat exports. The government is contemplating involvement of the private sector in procurement, storage and export. The federal cabinet has already removed bureaucratic barricades such as NOCs.


    [This message has been edited by Malik73 (edited June 20, 2001).]

    #2
    This is really good news. Earnings from these exports are especially important because of this year's draught.
    I hope we maintain the 21 million ton production barrier in the coming years as the needs of both Pakistan and Afghanistan are fulfilled by 20 million tons. It should leave us with at least 1 million tons for exports.

    [This message has been edited by Ahmed (edited June 20, 2001).]

    Comment


      #3
      It's particularly good news that from being a net importer of wheat, we have become a net exporter, despite adverse weather (drought) conditions. And it's encouraging to see our traders are adopting a business-friendly and competitice attitude towards our new markets. Hopefully this will prove successful with Iran and we will start exporting wheat there very soon as we are in Afghanistan and Iraq. The article alludes to the fact that we are posied to enter the middle eastern market which would be a great boon for our farmers and the economy.

      Comment


        #4
        You won't believe, I am really glad! Competition brings the best out of everybody.

        But on the other hand, did you know that UAE bought all the wheat that Iraq thought was of poor quality after UAE rigourously tested it for quality?

        Another thing is, though I am glad that Pakistan is exporting wheat after being a importer, I am also worried. Didn't Pakistan export sugar to India and imported the same sugar at a higher price, the next year? Hopefully my fears would be proved wrong!

        Another genuine doubt. Didn't I hear Pakistan is facing a drought affecting the agricultural sector so bad that the GDP growth had to be trimmed to 2.6 %? Now, does Pakistan have enough wheat to export or is it a ploy to pump up the prices?

        Comment


          #5
          Originally posted by Malik73:
          Very welcome news for Pakistan's economy and farmers. We are now exporting to Afghanistan, Iraq and possibly Iran beating regional competitors.

          http://www.atimes.com/ind-pak/CF19Df01.html

          Pakistan cuts into Indian wheat markets
          Iraq has rejected fourth shipment of Indian wheat as substandard not good enough for human consumption.

          My question is India with 50 percent of the population surviving at less than 1000 calories a day how can it export wheat?
          Same goes for Pakistan to a lesser extend.


          Comment


            #6
            Originally posted by Abdali:
            Iraq has rejected fourth shipment of Indian wheat as substandard not good enough for human consumption.

            My question is India with 50 percent of the population surviving at less than 1000 calories a day how can it export wheat?
            Same goes for Pakistan to a lesser extend.

            Guess what Mundya:

            India has been dumping wheat and rice in sea the last 3 years, due to lack of proper distribution. It is a shame.

            Comment


              #7
              Originally posted by kumarakn:


              India has been dumping wheat and rice in sea the last 3 years, due to lack of proper distribution. It is a shame.

              Lack of proper distribution and very poor quality you mean? Something which I'm glad Pakistan is seeming to overcome.

              Comment


                #8
                Originally posted by kumarakn:

                Guess what Mundya:

                India has been dumping wheat and rice in sea the last 3 years, due to lack of proper distribution. It is a shame.
                India is no America , WHERE IS THE SOURCE?
                There are only two forces in the world, the sword and the spirit. In the end the sword will always be conquered by the spirit. --Napoleon Bonaparte

                Comment


                  #9
                  Originally posted by PureLand:
                  India is no America , WHERE IS THE SOURCE?
                  Pureland here is what u asked for: If you didn't know India has been dumping food due to storage problems, well, get enlightened now. It has been going on at least the last 2 years.

                  Proposal to dump foodgrains into sea http://www.tribuneindia.com/20010226/biz.htm#6


                  ...The latest effort is to dump the wheat rotting in the FCI godowns in the sea. ... http://www.hindubusinessline.com/200...s/040803mn.htm

                  Farming : Paradox of Plenty http://www.bharatnet.com/health/consumer/wheat.htm

                  Shame on our logistics and supply-chain management.

                  Malik:
                  Wanna know about Quality, Ask UAE . Iraq is so starved that it has lost the taste for good food I guess!

                  or may be we dump or export rootten food. We use the good ones

                  [This message has been edited by kumarakn (edited June 20, 2001).]

                  Comment


                    #10
                    Originally posted by kumarakn:
                    Pureland here is what u asked for: If you didn't know India has been dumping food due to storage problems, well, get enlightened now. It has been going on at least the last 2 years.

                    Proposal to dump foodgrains into sea http://www.tribuneindia.com/20010226/biz.htm#6


                    ...The latest effort is to dump the wheat rotting in the FCI godowns in the sea. ... http://www.hindubusinessline.com/200...s/040803mn.htm

                    Farming : Paradox of Plenty http://www.bharatnet.com/health/consumer/wheat.htm

                    Shame on our logistics and supply-chain management.

                    Malik:
                    Wanna know about Quality, Ask UAE . Iraq is so starved that it has lost the taste for good food I guess!

                    or may be we dump or export rootten food. We use the good ones

                    [This message has been edited by kumarakn (edited June 20, 2001).]
                    If its Rotten its not surplus...

                    Comment


                      #11
                      >>>Guess what Mundya:

                      India has been dumping wheat and rice in sea the last 3 years, due to lack of proper distribution. It is a shame.<<<<

                      thanks zz. was that before or after Kargil? is ISI responsible for this too?

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