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Export operation 2010-11 by Punjab Food Department              
By Najam Ahmed Shah, Director Food Punjab

At the closing of last year’s procurement, the Food Department stocked a quantity of 6.6 million metric ton (MMT) of wheat in July, 2010. The main buyers of the wheat from the Food department are the local flour mills. A quantity of 2.8 MMT was expected to be sold to the flour mills during the current release year as per five years average, leaving a huge balance of 3.8 MMT.

On account of this Provincial Government took up the matter with the Federal Government to allow the export of wheat in March 2010. On 21 December 2010, Federal Government allowed export of wheat and within a fortnight the Food Directorate made extensive negotiations with all the stake holders especially the potential exporters and devised a comprehensive strategy, frame work and Operational System for export of wheat through private sector.

The first agreement of export of 100,000 MT of wheat was signed by the Food Department and a Karachi based exporter on 03-01-2011. Since then there was no looking back. It is of paramount importance to explore here that during the four years i.e. 2001, 2002, 2003 and 2006, Food Department accumulatively sold 801,112 MT of wheat for export. During these periods the sale process remained operative from the start of the scheme till the closure but in the present case 827,397 MT of wheat has been sold to the exporters within short span of three months only.
 

 

 
YEAR QUANTITY SOLD (MT)

2001

66,043

2002

565,799

2003

44,270

2006

125,000

Total

801,112


As a result of this ongoing exercise up to 08-04-2011, department has successfully credited Rs 21 billion to Food Account. This has resulted in the timely retirements of loans and benefitted the government in shape of less interest/mark up. This also boosted the good will of the Food Department in the local and international markets.

To attract serious buyers a transparent and speedy system was put in place which not only eliminated conformance costs if any but also provided a corporate conducive environment for business and trade. This aspect has duly been acknowledged and appreciated by the firms, who worked with the Food Department.

It is imperative to point out here that majority of the firms were based in Karachi, but due to prompt, speedy and un-hurdled export operations, they switched on their business with Punjab Food Department instead of Sindh Food Department, from where they were paying less Transportation charges, Rs 25 less per mound of wheat purchased and no stringent financial requirements like LC for credit, which incurs another Rs. 25 per mounds extra cost. In addition to this, another advantage of Sind over Punjab was long term relationship between the Sind Food and Karachi based exporters that needed to be matched by the Punjab Food Directorate.

 

 

In order to overcome such handicap, the Punjab Food took the following steps:

1.      Standard Form of Agreement for export.

2.      Standard In land letter of credit for 45 Days with deferred payment.

3.      Standard Options/packages to opt for based on quantity for export.

4.      Advertisement in Newspapers and placement of all information and data on the Food Department website

5.      Information Cell was created at Lahore

6.      Meetings were held at Karachi with exporters by the Director Food Punjab.

7.      Rs. 25 per mound rebate incentive as sharing of transportation charges was given to the exporters on successful export of 100,000 MT. This served as performance based reward for serious exports.

8.      Information sharing in the export supply chain and immediate support to exporters in case of any bottlenecks or difficulties in transaction associated not only with the Government of Punjab but also with Federal Government agencies like KPT, Port Qasim Authority, FAP, NLC and private transporters and international buyers.  The success story of getting prioritized 2 berths at KPT and opening of Marginal wharf for wheat exports at PQA are few such examples. The directorate adhered to zero tolerance against delays and defects. the following were ensured

a)       One day process time of LC.

b)       Zero tolerance against corruption or inefficiency at any level.

c)       24/7 issuance of wheat from storage centres.

d)       Date wise maintenance of accounts for Firms, District & Division.

e)      Error free and exporter friendly speedy process

 

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