KARACHI, May 26: Sindh Food and Agriculture Adviser Ghulam Murtaza Jatoi has warned wheat traders that the government will start releasing its stocks from the next month if wheat flour prices continue to rise despite suspension of wheat export.

But traders are not ready to take adviser’s warning seriously as one of them from Jodia Bazar said that there is hardly 1,000 tons of wheat in government stocks in Karachi. The government has procured about 560,000 tons of wheat this season but has not transferred a single grain to Karachi.Mr Jatoi blamed the federal government of taking a premature decision on export of wheat. “The wheat export has been suspended on our suggestion,” he told Dawn while drawing attention to a message conveyed to Islamabad a few days ago.

But wheat prices continue to crawl up and push up retail prices of wheat flour for the consumers because the wheat supply from upcountry to Karachi remains disturbed owing to transport problems.

Wheat flour in Karachi is being retailed at Rs15 to Rs18 a kg but no shortage was reported from anywhere. Officials in Sindh government are confident of getting wheat supplies in a day or two.

The adviser is confident of building up the wheat reserves in Karachi within a week or so and he made it clear that if there was no improvement in supply situation by early next month “we will seriously consider intervening with our stocks in the market”.

Normally, the government releases from its stocks to the local flour mills late August or early September to maintain a steady supply during “lean six months period of October to March”. About 350,000 to 400,000 tons are supplied to the flour mills in six months period “on an issue price indicated by the federal government”.

Explaining the reasons as to why the procured wheat could not be transferred to Karachi during last few weeks, Mr Jatoi said that the government received transport bids in response to three tenders which were almost three times higher than normal. Under the rules, the government cannot accept such a high bid for transportation.

“We have just accepted a bid for transportation and we hope to start wheat supply quickly,” the adviser hoped. The government has storage capacity of 150,000 tons in Karachi and can acquire godown capacity for 100,000 tons more if there is such a need, he added.

Meanwhile, the wheat exporters with about 0.7 million tons of export orders and letters of credits established in their names by their foreign importers are exploring all options to lobby for resumption of their business. Pakistan Wheat Association held a meeting on Friday evening to take stock of the situation.

Mr Abdul Karim, vice-president of the association, said that he was not in a position to give accurate position of how much order were booked and how much was shipped so far. According to his information 366,000 tons of wheat had already been shipped.

He indicated that there were letters of credit in name of Pakistan’s wheat exporters for about 650,000 to 700,000 tons. The association members, he said, bought 0.2 million tons of wheat from PASSCO for export only.

This wheat, he said, cannot be sold back in the local market. The exporters were now stuck up with $50 million orders with no way to export or disposal in the local market.

He said that the average price obtained by the exporters was about $220 a ton which indicate realisation of about Rs5 billion from the shipment of 366,000 tons. The exporters netted profit of about Rs450 million from this business.

“But the real loss for us is not in terms of money but breach of contract because of this abrupt export suspension decision by the government,” Mr Karim said.

Traders say that international trade agreements are covered a clause which safeguards the interest of the exporters in case the government suspends the exports for some reason or apply some condition.

Mr Karim did concede of some hoarding and speculation resulting from export of wheat which has caused problems for the consumers.