Prospects improve of wheat, cotton exports to Pakistan

The thaw in diplomatic relations between India and Pakistan will boost prospects for export of wheat and cotton to Pakistan, agricultural scientists and government officials said Tuesday.

The opening up of land routes for trade will result in cheaper and faster trade in commodities, which so far had been happening on the sly, they said.

India, which has had a bumper crop of wheat and cotton in the current July-June season, has been exploring neighbouring markets to sell off surpluses. This is expected to receive a fillip after the decision to set up a joint Indo-Pak business council.

Logistically, it is viable for Punjab to sell its surplus wheat to Pakistan through the land route and a proposal to this effect must be pursued, agriculture secretary Radha Singh said.

"Our proposal seeking export of wheat to Pakistan via Wagah land border in Punjab is with the centre and if we get the go-ahead it will be an excellent opportunity to trade," said S S Channy, managing director, Punjab Markfed.

He said that due to proximity with Pakistan freight costs will be much lower and it will be a win-win trade scenario for both countries.

The Indian government, in its latest projection, has put wheat output in the current season at 74 million tonne, up 2 million tonne on year.

It feels there is a surplus of 5-7 million tonne, which can be exported during April-March 2006.

On the other hand, Pakistan is in the process of building a strategic wheat stock and is expected to import 1-1.5 million tonne wheat in late 2005 despite a rise in output this season to around 20.4 million tonne from 19 million tonne in 2003-04. Punjab Markfed, a state government-run co-operative, feels that India could help Pakistan meet this requirement.

However, food ministry officials feel, making Pakistan agree to buy Indian wheat will still be a tough call as the western neighbour has time and again raised concerns over the quality of the crop here.

In 2001, it had even refused transit facility for Indian wheat aid to Afghanistan on the pretext that it contained karnal bunt fungus.

"There have been no reports of karnal bunt infecting the wheat crop as weather was not conducive for the fungus," project director of Karnal-based Directorate of Wheat Research, Jag Shoran said.

He said there has been a good wheat harvest this season despite rains and hailstorms in the last week of March and adequate quantities will be available for export.

India's cotton output in the current October-September season has already touched an all-time high of an estimated 23 million bales of 170 kg each against 17.7 million tonne in 2003-04. The government is keen to boost exports to shore up low domestic prices.

The textile ministry has favoured exports to Pakistan by rail through the Wagah border to liquidate excess stocks.

According to data made available by the US Department of Agriculture, Pakistan's cotton production and consumption are also expected to hit historic highs this season.

US estimates production at 10 million bales, up 29 per cent from the previous year. Consumption is put at 10.1 million bales, up 5 per cent from the previous year.

The country will continue to import high quality cotton, mostly from the US, to meet its yarn and apparel export requirements.

Its imports are pegged at one million bales.

Both agriculture and textile ministries contend that part of these Pakistani imports could be easily made from Indian Punjab.

Meanwhile, Associated Chambers of Commerce and Industry has identified cotton and textiles as one of the nine core sectors in which business between Indian and Pakistan should be enhanced through the joint business council.