Pakistan export ban to stay until prices fall

Pakistan will not export wheat until local prices of the grain fall from levels inflated by speculative buying in anticipation of overseas sales, an economic adviser to the government said.

"Exports will remain suspended till prices go back down to the pre-manipulated level and can remain suspended forever,'' Ashfaque H Khan said in a phone interview from Islamabad yesterday.

"This price manipulation is a pressure tactic and we are aware of it,'' he said, estimating traders had hoarded as much as 900,000 metric tonnes of the grain.

Pakistan, which halted wheat exports on May 23 as domestic prices jumped, had planned to export the grain for the first time since 2003.

The export ban may increase demand for alternative suppliers, including the US, Australia and Canada, and help to support international prices, which have risen 25 per cent this year, close to a record high.

"The trouble with prices comes from within, not from the export angle,'' said Hamid Ahmed Gharib, president of the Wheat Exporters Association in Karachi, referring to procurement and distribution problems that have led to shortages in some areas.