Wheat exporters saved the wheat prices from crashing and ensured the growers fair price of their produce as the country had a bumper crop this season and the provincial government had a carry over stock of 2 million tons in its godowns, food department officials and grain market sources told Business Recorder here on Wednesday.
It is worth mentioning that the Punjab government adopted a new strategy and vision to procure /trade the most valuable commodity of the province and involve wheat exporters to procure as much wheat as they need for export purposes amid reports of bumper wheat crop.
The provincial food department signed agreement with 37 parties mainly from Karachi allowing them to buy wheat against a permit issued by the department for immediate export. Food department officials said that the Karachi based exporters purchased about 500,000 tons wheat in South Punjab out of which they have almost exported whole wheat procured by them. It was not cost effective for them to buy wheat and keep it in stores. It was in their benefit to export the commodity at the earliest.
They said that involvement of exporters in wheat procurement this year provided a double-edge benefit to the growers as these parties not only procured large quantities of wheat but their active presence in the grain market also resulted in stability of prices and lessened the economic /social burden of the government.
A prominent agro-economist and grower of Bahawalpur Farooque Bajwa said that seeing the competitive exporters in procurement drive, local buyers also started buying the available stocks at the prevalent market price. It may be recalled that earlier flourmills, Arthis and the middlemen used to sit on the sidelines and cunningly wait for exit of the Food department from the grain market. Once the Food department was out of the business, these private parties would jump into the arena to buy the remaining wheat at their own manipulated rates and mint rental money at the cost of the poor farmers.
He said the wheat prices remained within the reasonable limits of Rs 850 to Rs 950 per maund throughout the season in the province as a third party was in the field to buy wheat without any manipulation or hiccups. Market players further told Business Recorder that the cash starved Punjab Food department started wheat procurement on 20th April 2011 after a delay of 10 days due to rains in the province. Private sector also hesitated to buy the rain-affected wheat in south Punjab in early April.
Sources said that since the government had about 2 million tons of wheat from the last year's stock and there was not much space to keep the new stock of 3.5 million tons, the government's decision to allow the private sector to buy wheat only for immediate export paid the dividend and rate started rising in the first week of May.
They said some Afghan wheat traders also jumped into the field and they too purchased about 0.6 million tons of wheat to feed Afghan people. However, sources admitted that Afghan traders ' wheat purchase is not recorded anywhere as they have their own method of payment and procurement, sources said. Speaking about the total wheat procured by the department this season, sources said Punjab produced about 19 million tons of wheat, out of which Food department purchased 3.192 million tons against the target of 3.5 million tons.