Pakistan mulls 35% export duty on wheat flour

Throwing another spanner on India's efforts to beef up its food security by buying grain or grain products from Pakistan, the neighbouring country is planning to impose 35 per cent export duty on wheat flour.

The proposal comes close on the heels of the Indian government's plan to allow duty-free wheat flour imports to keep domestic prices in check during the festive season.

If India cuts import duty on wheat flour to nil from the current 30 per cent, Pakistan is the only viable option for imports as it is the only neighbouring nation with surplus of the grain available for export.

Flour imports from distant countries such as the US or the European Union is not possible as the commodity has a short shelf-life, and its quality may deteriorate in transit.

For India, flour imports from Pakistan would also work out very economical. An industry official said India will be able to get flour from Karachi at $270-280 (Rs 11,000-11,400) a tonne and refined flour at about $293-295 (Rs 11,900-12,000) at western ports, which works out much cheaper than current prices of about Rs 15,000-15,500 a tonne in west and south India.

The Pakistan government fears large-scale export of wheat flour may trigger a sharp rise in local wheat and flour prices. It is, therefore, planning to impose an export duty on flour, the official said.

Pakistan's wheat output is seen at a record high of 23.5 million tonnes, at least 2 million tonnes more than domestic demand and buffer need.

In June, the country had banned wheat export as domestic retail prices had shot up due to hoarding by traders, who were hoping to export large quantities to India. At that time, private traders from India were importing the food grain from Pakistan.