Home »Agriculture and Allied » Pakistan » Export of 0.5 million tons of wheat/wheat products: Passco allowed to initiate fresh bidding process
The Economic Coordination Committee (ECC) of the Cabinet has allowed Pakistan Agriculture Storage & Services Corporation Limited (Passco) to initiate fresh bidding process for further export of 0.5 million tons of surplus wheat/wheat products, official sources told Business Recorder. The decision was taken on January 29, 2019 presided over by Finance Minister, Asad Umar on a summary tabled by the Ministry of National Food Security and Research.

The sources said Passco and Provincial Food Departments of Punjab and Sindh have procured wheat stocks of 0.900 million tons, 3.623 million tons and 1.400 million tons respectively. With the addition of carry-over stocks of 5.942 million tons, the Food Year (May 1, 2018) started with considerable quantity of 11.931 million tons. At present, stock position is at the level of 7.436 million tons, which depicts a considerable surplus stock. On the request of the Governments of Punjab, Sindh and Passco, a plan was submitted to the ECC on November 16, 2018 with the request to allow export of 3.1 million tons of wheat and wheat products i.e. 2 million tons from Punjab, 0.5 million tons from Sindh and 0.6 million tons from Passco. However, after a detailed discussion the ECC on November 20, 2018 decided to allow export of 0.5 million tons of wheat/ wheat products (flour fine, Suji and Maida), and 0.10 million tons to Passco; Governments of Punjab and Sindh 0.40 million tons to be divided in proportion to their indicated availability for export with the direction that freight support for export of wheat in respect of Passco will be paid by the federal government, while Governments of Punjab and Sindh may bear freight support charges for their respective exports.

Ministry of National Food Security and Research notified the decision on December 12, 2018, after consultation with the Ministries of Finance and Commerce on export modalities and forwarded to all stakeholders. In compliance with the ECC decision, Passco invited open bidding which was completed on January 11, 2019. Through bidding process, fairly competitive rates (highest @ Rs 32,759 tons) have been received, which are over and above the purchase price (less incidentals) of Rs 32,500 per ton.

According to sources, in order to create physical and fiscal space for new wheat procurement, the Ministry of National Food Security and Research proposed that Passco may be allowed to export remaining 0.5 million tons surplus wheat/wheat products (flour fine - Suji and Maida). Out of this quantity, 0.4 million tons may be exported through sea route and 0.1 million tons through land route, on methodology as approved by the ECC on November 20, 2018.

The following options were presented before the forum in this regard: (i) Passco may be allowed to export wheat on basis and price offered in its earlier bid held on January 11, 2019 aimed at saving one month bid time; or (ii) Passco may be directed to initiate afresh bidding process which will be time consuming.

During discussion, it was pointed out that wheat price in the international market has been continuously increasing in the recent past. Furthermore, a bumper wheat crop is expected this year. Hence, it is appropriate to export surplus wheat available with Passco. It was suggested that Passco may be allowed to export wheat on basis and price offered in its earlier bidding held on January 11, 2019 rather than initiating bidding process afresh for exports because in case the route of fresh bidding is adopted it might not be possible to dispose off surplus stocks before arrival of the new wheat crop. It was also suggested that bidding process may be initiated for additional export of 0.5 million tons of surplus wheat/ wheat products by Passco.

After detailed discussion, the ECC allowed Passco to export 0.5 million tons of surplus wheat/wheat products (flour) through sea and land route. Exports will be made on the basis of earlier bidding held on January 11, 2019 to save the time required for fresh bidding.

The ECC also allowed Passco to initiate fresh bidding process for further export of 0.5 million tons of surplus wheat/ wheat products.

Copyright Business Recorder, 2019


the author

I did graduation from the Government Murray College Sialkot and MSc in Psychology from the University of Punjab. I am in journalism since 1990. I worked in Daily Nawa-i-Waqt as sub editor and staff reporter in Daily Pakistan and Daily Din prior to joining Daily Business Recorder. I have been associated with this newspaper since 2000 as staff reporter. Energy Sector, Commerce / Trade and Industries are key areas of my interest. I have also the credit of exposing number of scams like Rental Power Plants (RPPs), LNG, sugar import, etc.

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