LAHORE - The wheat export policy is being widely misused by big exporters, as wheat is purchased from food department and is sold in the local market and rebate is collected on fake documents.
Market sources said that that government wheat export policy could not be fruitful despite announcement of huge rebate for the exporters, as Punjab could export maximum of 150,000 tons with surplus stock of around 1.8 million tons only in single province.
Due to surplus wheat Punjab was given target of exporting 0.8 million tons of wheat while Sindh was to export 0.4 million tons and both federal as well as provincial governments announced rebate to attract exporters. First announcement of export was made in March 2015 and period of export expanded three times but export target was not achieved.
The country could succeed to export around 0.5-0.6 million tons of wheat to Afghanistan annually when the rate was at Rs1200 per ton locally. And now despite announcement of $90 rebate on each ton export target is not being achieved mainly due to high price of commodity.
It is to be noted that the Economic Co-ordination Committee (ECC) of the Cabinet had allowed Punjab government to export surplus wheat on government-to-government basis in March aimed at creating physical and fiscal space for the provincial government for fresh procurement.
Tajikistan had contacted government of Punjab, showing its interest in import of 5000 MT wheat from Pakistan.
ECC of the Cabinet in its meeting held on March 23, 2015 decided to allow export of 0.8 million tons of wheat from Punjab with the transport rebate of $55 per metric ton and 0.4 million tons from Sindh with the transport rebate of $45 per M/ton. Governments of Punjab and Sindh were also facilitated with the additional rebate of Rs 3,500 and Rs 4,500 per ton. The transactions were allowed only through private exporters.
Higher prices of domestic wheat posed a challenge to the local exporters in their export endeavours. Due to higher stocks of wheat and lower international prices of the commodity, Pakistan was to make concerted efforts to export surplus wheat stock in order to create physical and fiscal space for the new crop procurement.
A small quantity of surplus wheat could be exported by the private sector despite attractive rebate on export.
The earlier decision of the ECC of January 23, 2015 only allowed export through private sector without any rebate.
Traders said Pakistan could add several hundred thousands of tonnes of extra supply in world markets, helping to compensate for the exit of Russia from the export sector.
Dr Bilal Sufi, chairman of Standing Committee on Wheat and Flour FPCCI, suggested the govt to stop rebate policy on export as it is leading to a big wheat export scandal in which wheat is purchased by the food department and sold in the local market whereas rebate is applied for on fake documents. He said this practice is not only causing damage to wheat export policy but also rendering 95% of flour mills as scrap which are unable to purchase wheat costly. He suggested Punjab govt to stop releasing rebate on wheat export. Instead, the government should decrease wheat rate to Rs1200 per 40 kg, facilitating everyone to export wheat or sell it locally while mills will also be facilitated. In present export policy there is restriction of minimum 5,000 tons of export and only big exporters are eligible to export wheat who are misusing this rebate facility.
Bilal Sufi said that Food department is presently releasing wheat to exporters at around Rs1120 per 40 kg (after payment of rebate) which is hurting national exchequer. If minimum limit for export is removed along with announcing new price of wheat at around Rs1200 the Punjab wheat will be lifted in full speed by the mills as well as the small and big exporters, he suggested.