The Economic Coordination Committee (ECC) of the Cabinet has extended the export period of 0.5 million tons of wheat/wheat products with a freight subsidy of $ 150 MT through Pakistan Agricultural Storage and Services Corporation Ltd (PASSCO) by two months, ie, till September 30, 2018, official sources told Business Recorder.
On April 26, 2018, the ECC while considering a summary of Ministry of National Food Security and Research had allowed PASSCO to export 0.5 million tons of wheat through sea route, with a freight rebate of $ 155 per ton. The last date for export of wheat was fixed at June 30, 2018 and the export process was required to be completed by July 31, 2018.
The decision was validated by the federal cabinet in its meeting on April 26, 2018 which was conveyed by the Cabinet Division on May 14, 2018. The Ministry of National Food Security and Research accordingly notified the Cabinet decision on May 15, 2018.
After receiving the notification, PASSCO in a letter written on May 23, 2018 requested that only 30-35 days period is left to complete the entire export quota which is not expected to be completed by the stipulated date, due to Ramazan given the working environment especially prevalent during this month. PASSCO, therefore, has requested for extension in the export period up to August 31, 2018 and completion of the export process by September 30, 2018.
According to sources in line with the decision of ECC, an advertisement was immediately published in two national dailies and one local Sindhi newspaper besides uploading it on PASSCO website. However, the response of the exporters has been somewhat lukewarm with only three exporters showing an interest in purchase of 130,000 MT of wheat. The major reasons for such a mellow response were identified are as follows: (i) huge difference in selling price of exportable wheat of PASSCO, ie, Rs 22122.00 and provincial food departments i.e. Rs 14,930.50 (21122.00 - 14,930.50= Rs 7191.50 per MT); and (ii) the time line to complete export process has been the same for provincial food departments, ie, June 30, 2018 for completing exports and July 31, 2018 for completion of documents etc. Provincial food departments commenced the export process in February 2018, with more than 120 days to complete the export whereas PASSCO is left with only 30-days to complete the process. The export of provincial food departments, has, therefore, been a great success because of these factors.
The sources further stated that PASSCO does not intend recommending any revision in sale price of exportable wheat. Ministry of National Food Security and Research strongly recommended extension in time lines for completion of exports and export process/documentation respectively in order to attract more potential exporters. Current month of Ramazan, its natural effects on labour and working conditions and ensuring Eid-ul-Fitr holidays may also be factored in.
The Ministry of National Food Security and Research recommended that ECC may allow extension in export period of wheat by PASSCO up to August 31, 2018 and completion of export process by September 30, 2018 to facilitate the export of 0.5 million tons of wheat and wheat products through sea route on the same terms and conditions as allowed by ECC in its earlier decision of April 26, 2018.
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