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Passco offloads 0.4 million tons of wheat stocks




  • Pakistan Agricultural Storage and Services Corporation (Passco) has offloaded some 0.4 million tons of wheat stocks in a week aimed at stabilising the commodity price in domestic market. Under the second phase of wheat offloading, on March 5, 2013, Passco had announced that it will offload some 0.6 million tons of wheat stocks at Rs 1,100 per 40-kg (without bags) in the domestic market. 

    As per the announcement, first three days were exclusively reserved for flour mills to ensure maximum supply to mills, while traders were also allowed to submit there applications after three days for the remaining quantity, not procured by mills. In response to Passco’s offer, applications for the sale of about 400,000 tons of stocks were received during last one week, sources said. 

    Initially, it was being expected that complete offered wheat stocks will be sold out in a single day, however despite a week, the offered quantity is not procured by mills and traders mainly due to arrival of new crop. Sources said the delayed decision of the wheat stock offloading has resulted in slow sales and now Passco is facing problems in the offloading mainly due to arrival of new crop in the market. 

    During the first three days, some 450 flour millers submitted applications for wheat procurement and accordingly the required quantity was sold to mills. However, millers have not procured complete offered quantity, therefore in order to sell leftover stocks, Passco has started receiving applications from traders since Friday and so far about 50 applications have been submitted by traders. 

    Cumulatively, some 0.375-0.4 million tons of wheat stock has been procured by flour mills and traders during last one week against the offered quantity of 0.6 million tons. Sources said flour millers and traders’ response is not encouraging as was in the first tender in which complete offered stocks were procured by them in a single day. Earlier, in January this year Passco put some 0.2 million tons wheat stocks on sale and the complete quantity was sold out in a single day, they added. 

    Passco is still getting applications for sale of wheat stocks and will receive applications till sale of 0.6 million tons stocks, they added. They said that Passco’s wheat godowns located in Khanpur, Hafizabad and other surrounding areas have been almost vacant, while wheat stocks are still available in the godowns of Pak Pattan, Multan, Bhawal Nagar and Vehari. However, they said that Passco’s offloading decision has put a positive impact on the commodity price as wheat prices in the domestic market have witnessed massive fall after offloading of stocks. 

    Copyright Business Recorder, 2013

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