Mystery surrounds export of wheat, flour despite ban

ISLAMABAD: Mystery prevails over the export of wheat and wheat flour — said to be responsible for the wheat flour price crisis — until the end of October despite a ban imposed in July and the ministries concerned are reluctant to offer any explanation. In June last year, the Economic Coordination Committee (ECC) of the cabinet had noted that wheat and wheat flour would be in short supply in the country, but did not halt their export as well as other processed products like suji and maida and put the issue on the back burner.

Over the next few months — from end of July to first week of November — a number of notifications were issued by the ministries of food security and commerce to ban export of these products, but somehow these were reported in the data compiled by the Pakistan Bureau of Statistics (PBS).

With a persistent increase in prices of wheat and wheat flour in the local market, the ECC finally decided to impose a ban on export of wheat and wheat flour on July 17, 2019. It took another 13 days to fulfil the procedures for issuing the notification on July 30. Just one week later, the food security ministry issued a clarification that exports of other wheat products like fine atta, maida and suji were excluded from the ban list of exports. This exclusion and relaxation paved the way for export of these products.

ECC noted short supply in June, but put issue on the back burner

The PBS data shows that export of wheat stood at 2,060 tonnes in September and 1,887 tonnes in October 2019. However, no export of wheat was recorded in August. The country exported 89,237 tonnes of wheat in June and July. The PBS data posted on its website did not specifically classify export of wheat flour separately.

The customs department of the Federal Board of Revenue (FBR) has also been approached to probe how exports of these products were made despite the ban. An official source told Dawn that the commerce division had also raised the issue with the FBR, but the latter was reluctant to share data with the former, which involved some ‘specific firms’ for making exports.

The source said the customs department was not willing to share data of the firms involved in exports despite the ban. However, the prime minister secretariat might have been given the data, claimed the source.

Three major destinations were reported for the export of wheat and wheat flour between July and October 2019 — Indonesia, Sri Lanka and Afghanistan. With the exclusion of wheat and other products, export of fine atta, which is extracted from wheat, was allowed since Aug 7, 2019 by the food security ministry. It is used for tandori products and making nan (roti).

At the same time, export of maida or refined flour is also allowed. Maida is used for baking, caking and making chapati. Export of suji, another wheat product used in making halwa and sweet, was also allowed.

The data on exports of other wheat products — fine atta, maida and suji — is available with the customs department which it did not share with anyone. However, the PBS data also did not classify of exports of these products separately.

According to the data of the department of plant protection (DPP), export of maida stood at 5,928.6 tonnes between Aug 19, 2019 and Oct 19, 2019 — the period during which the food security ministry allowed its exports. The export of suji was recorded at 92 tonnes between September and October.

The DPP is responsible for regulating import and export of agricultural commodities with respective to sanitary and phytosanitary measures under national and international rules.

Interestingly, the DPP data showed that from January to July 2019, no permission in the shape of quarantine certificate was sought from the department for exporting maida. But in the wake of imposition of ban on export of wheat and wheat flour, all of a sudden in three months — August, September and October (2019) — certificates were obtained for exporting maida which raises questions whether or not maida was actually exported.

The DPP data also showed that no certificate was obtained for export of wheat and wheat flour since August 2019. This also adds to the mystery that how exports of wheat and wheat flour were made without the DPP certificate between August and October 2019.

Due to the price hike in the country, the government finally imposed a ban on fine atta on Oct 26, 2019. With a delay of almost one week, ban was also imposed on export of maida and suji on Nov 2.

According to a statement issued by the official spokesperson for the commerce division, there were two different approvals given by the ECC and both were notified by food security ministry, which were sufficient for banning exports.

However, the commerce division incorporated the same in the export policy order after getting it approved from the law division in the form of SROs. “But exports were not allowed by customs after notification of the food security ministry,” claimed the statement.

The November SRO banning exports issued after vetting by the law division on the ECC decision in October for ban on export of wheat products was not for August, according to the commerce ministry’s spokesperson.

According to the DPP data, Pakistan also exported wheat straw, paratha and vermicelli. The export of wheat straw stood at 247,366 tonnes between Jan 2019 and January 2020, and that of paratha at 1,571 tonnes and vermicelli at 4233 tonnes. There is no ban on export of these products.