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Government okay with Punjab exporting wheat to Pakistan

The decision came after the Punjab govt sought the commerce ministry's permission to export wheat from its choked warehouses to Pak.

, ET Bureau|
Updated: Jul 02, 2012, 04.10 AM IST
NEW DELHI: The Union government, in principle, has agreed to export wheat to Pakistan. The empowered group of ministers on food has asked the Punjab government to work out a proposal for exporting wheat to Pakistan through the Integrated Check Post (ICP) on the Attari border.

The decision came after the Punjab government sought the commerce ministry's permission to export wheat from its choked warehouses to Pakistan.

"We are facing a wheat glut here with no more space to store grains. We have asked the Union government to allow us to export wheat directly. We are waiting for the Union government's decision," said Punjab food and civil supplies secretary DS Grewal.

Wheat procurement in Punjab has touched an all-time high of 128 lakh tonne forcing the state government to press for exports from Punjab-based central warehouses. "We have a stock of around 165 lakh tonne of wheat. We need to move the grain fast to create storage space," he said.

Punjab deputy chief minister Sukhbir Singh Badal has been demanding that shipments be allowed to Pakistan and other CIS countries through Attari. "If we can allow exports of sugar and cotton, why the Union government can't take a bold step of allowing wheat exports through the land route," he had said in a public meeting.

Government okay with Punjab exporting wheat to Pakistan

But Pakistan has more wheat than it needs this year. It has produced 23.5 million tonne wheat this year as against the domestic demand of around 21 million tonne. It has exported 1.8 million tonne to Saudi Arabia, Egypt and the Gulf countries.

Pakistan's wheat imports were valued at $10.725 million last year but this year there were no imports. "There is no demand from Pakistan. We are surprised why the state government is pressing for wheat exports across the border?" said Sanjay, a grain exporter based in Amritsar.

Meanwhile, the food ministry is likely to present its proposal to the Cabinet on Tuesday seeking approval for incentivised export of 2 million tonne from the central stock. The food ministry envisages an export subsidy of Rs 750 per quintal for moving wheat from its choked warehouses as international prices are significantly lower than the government's cost of buying and storing the grain.

"Global prices are around $228-230 a tonne while the government's cost is $328 a tonne. If export happens, the government will have to shell out the differential," said a food ministry official.
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