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Wheat imports up as world prices fall

KARACHI: The import of wheat rose substantially in the July-September quarter of this year, mainly because of decline in world prices....

Wheat imports up as world prices fall

KARACHI: The import of wheat rose substantially in the July-September quarter of this year, mainly because of decline in world prices.
Imported wheat, which is slightly low in quality, is available at Rs3,200 per 100kg in the open market while the locally produced wheat is selling for Rs3,400.
Quality of wheat is checked through its specification, moisture level and gluten.
Millers are producing flour varieties by blending both imported and local wheat.
Pakistan started importing wheat from August 2014 with 44,832 tonnes costing Rs1.302 billion.
In September, the imports jumped to 230,000 tonnes whose bill stood at Rs6.329bn.
It means that per 100kg bag price in September came down to Rs2,751 compared to Rs2,900 in August.
According to Pakistan Bureau of Statistics (PBS), total import bill of wheat in July-September quarter of this year rose to Rs7.631bn from imports of 274,832 tonnes compared to Rs4.29bn from 138,751 tonnes a year earlier.
The price for 100kg wheat bag price for the quarter comes to Rs2,776 this year against Rs3,000 in the same period of 2013.
Traders said some millers and market people had already planned to import over 700,000 tonnes initially in view of drop in wheat prices in world markets, besides bridging demand and supply gap in local markets to keep flour prices stable.
Karachi Wholesalers Grocers Association (KWGA) Chairman Anis Majeed said imported wheat price hovered around Rs3,150-3,250 per 100kg since its arrival from August till date, but it is still cheaper than locally produced wheat.
Based on previous commitments and continued arrivals of ships, total wheat imports may cross 500,000 tonnes by end of October and up to 700,000 tonnes by December, he said.
When asked what benefits import of wheat has for consumers, he said wheat from abroad has creates a sort of competition at home, besides helping stabilise flour prices.
He said traders and millers may import more wheat if world prices fall. This would nullify the negative impact of rupee-dollar parity.
A flour miller said various expenses from releasing wheat from the port to the mill or markets come to Rs550 per 100kg bag. Because of frequent wheat imports, the millers have reduced flour no.2.5 price to Rs37 per kg from Rs40 a few months back.
The rate of flour in Karachi has been the lowest compared to other cities, mainly because of wheat imports, he said.
The provincial governments have reportedly urged the federal government to impose 20 per cent duty on import of wheat. “If this happens, the price of flour will revert to Rs40 per kg,” he said.

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