Wheat procurement process: food department contemplating involving exporters

Punjab Food Department is contemplating involving wheat exporters in the procurement process by issuing them permits to buy the commodity from the province and later transport it to their own storage situated in Karachi.
Sources in the provincial food department told Business Recorder here Monday that they are in touch with some five private wheat exporters from Karachi who are interested in buying wheat from Punjab province and shift it to their warehouses in order to export it whenever needed.
The food department and exporters may sign an agreement in few days and it is being estimated that they will buy some 300,000 to 400,000 tons of the commodity from the province for export purposes. The food department will issue exporters permits so that they may not face any hardships in this regard.
Talking about the advantages of such a mechanism, sources said wheat bought by these exporters would be transported and stored by them on their own expenses thus reducing burden on the provincial food department. Exporters could buy from growers on lesser rates compared with the stock being already released to the intending exporters. The department would not only facilitate the exporters in buying and transportation of the wheat, but also ensure that they buy wheat from growers on reasonable rates, sources added.
They said if such an agreement proves beneficial for all including the department, exporters and growers then the department might invite other exporters for signing agreement on same lines. However, the idea is being finalised at the moment and modalities are being fine-tuned to make such an arrangement a success, they claimed.
It may be mentioned here that the food department is already working in collaboration with some exporters from Karachi and accumulatively sold 801,112 metric tons of wheat for export. As a result of this ongoing exercise up to 8-04-2011, the department successfully credited rupees 21 billion to Food Account. This has resulted in the timely retirements of loans. The sources said that the department is also all set to launch procurement drive in the province from April 20 and also start distribution of gunny bags to the growers from the same date.