LAHORE - The stock of more than 4.5 million tons of wheat held with Punjab Food Department had become headache for the provincial government as the export policy is not bearing any fruit for the last four months.
The government has recently allowed one-month extension to the time period given for export of wheat and wheat flour for Sindh and Punjab for the fourth time despite opposition from Punjab government.
The wheat export target of 1.2 million is not be achieved despite four extensions in export period since March 2015 as Punjab could manage to export wheat around 200,000 ton while Sindh succeeded to export only 70,000 ton wheat.
According to official sources, the government is considering to reduce wheat price to Rs1200-1225 per 40 kg to dispose off the huge stock of 4.5 million tons in open market before the arrival of new crop.
They said that the govt is already bearing burden of around $90 per ton which is being provided to the wheat exporters in the form of transport rebate but export target was not attained. “The same facilitation will now be provided on local sale of wheat so that the leftover stock could be cleared before arrival of new wheat crop.”
As the rate of wheat in open market is far below the govt support price of Rs1350 per per 40 kg, the flour millers are also not interested in getting supply from the food department.
The govt decision to decrease the price of wheat to Rs1200 is the only way to sell out the whole stock of wheat by the next crop, officials said.
It is to be noted that Punjab Food Director had sent a summary to the central government, asking it to stop further extension in time period for wheat export because its wheat was not being lifted and diverted to again local market. He stated that more than 70 per cent wheat meant for export was being diverted to local market. So, there was no use of extension for wheat export policy, he added.
The director said that wheat export policy was being widely misused by big exporters, as wheat was purchased from food department and sold in the local market and rebate was collected on fake documents.
Due to surplus wheat Punjab was given target of exporting 0.8 million tons of wheat 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.
And once again the central government has granted one-month more extension to the time period given for export of wheat and wheat flour till the end of Sept.