Pakistan to scrap wheat export duty

Pakistan, the world's sixth-largest consumer of wheat, will scrap a levy on exports of the grain to boost overseas sales amid expectations of a bigger harvest.

The government will scrap the 15 per cent duty, said Ismail Qureshi, secretary at the farm ministry. A decision is expected within a fortnight, he said from Islamabad.

Pakistan plans to export 5,00,000 metric tonne of wheat in the year ending June on forecast of a bigger harvest this year.

Production may reach 22.5 million tonne, 1 million more than the estimated demand, enabling the nation to resume exports after a three-year gap, Qureshi said.

A resumption of exports from Pakistan may extend losses in global prices of the grain. Wheat futures in Chicago dropped to a three-month low on speculation that US farmers are selling more of their grain. Wheat has fallen 18 per cent since touching a decade-high of $5.57 on October 17.

Pakistan, which last shipped wheat in 2003, halted overseas sales in 2004 after a drought cut harvest and forced the country to buy 1.4 million tonne of the grain from Australia, Canada and other countries.

Pakistan's southern Sindh and central Punjab provinces that together grow 90 per cent of the nation's wheat, received rain in the first week of December, boosting crop prospects, Shakeel Khan, wheat commissioner, said.

Farmers plant the crop in November and December and harvest it from April to June.