Pakistan Govt Drops Wheat Production Forecast

The Pakistan government have reduced their wheat production forecast for the 2010 crop from 25 MMT to 22.3 MMT, citing drought.

There was no significant rain at all across the country in November and December 2009, say the Agriculture Ministry. However as only 10% of the nation's wheat is grown in non-irrigated areas, this will minimise output losses, they say.

The majority of the country's wheat is grown in Punjab, where over 6.841 million hectares of wheat has been planted, say the Ministry.

Official figures place government reserve stocks at 2.5 MMT, which will keep the need for imports down to a minimum this year, they add.

But of course they would say that wouldn't they? Private estimates suggest that wheat production this year will be around 19-20 MMT, double the government's shortfall, and that government reserves may be nearer 1.5 MMT taking into account large-scale smuggling into neighbouring Afghanistan.

Pakistan consumes around 23 MMT of wheat per annum. They also are said to have an imbalance in their rice production/consumption/export equation, which effectively means that they are exporting more rice than they have surplus in a desperate need to get some foreign reserves in.

Meanwhile, the government there are said to be in negotiations with oil-rich Saudi Arabia to lease it an area of farmland twice the size of Hong Kong to grow wheat, fruit and vegetables.

Saudi recently abandoned a drive to become self-sufficient in wheat, saying that the plan wasn't viable with the cost of irrigation and the country's inhospitable climate.

Money talks eh?