Pakistan will likely produce more wheat from its bumper crop than a government target of 25 million tonnes this year, paving the way for more exports from South Asia which could further dent world prices.
“There is no fear of any shortfall. It should meet our requirement, we should have some surplus,” Muhammad Saeed, chairman of the Trading Corp. of Pakistan, told Reuters.
“We are looking into exports. We will do value addition and send wheat flour to Afghanistan. Depending on the market conditions, we may export to the Middle East.”
Pakistan joins India in producing a record crop which may allow wheat exports from South Asia, adding pressure to an already depressed global wheat price.
India, the world’s second-biggest wheat producer, is expected to export the grain for the first time in six years after a near-record harvest of 77.8 million tonnes that is likely to boost stocks.
Wheat prices have dropped 62 per cent to US$5.12 per bushel since peaking on the global benchmark Chicago Board of Trade (CBOT) in February 2008, pressured by rising global supplies amid an economic slump.
Traders in Pakistan said the country was expected to sell up to two million tonnes of wheat flour.
“There will be no need for imports from the new year in April,” said a trader from Lahore. “We will export wheat products. We should be able to sell two million if the crop is as good as it looks.”
Pakistan produced 21.8 million tonnes of wheat in 2007-08 after the area under cultivation fell 2.6 per cent against a target area of 21 million acres and the government had to import wheat to cover the shortfall.