Pakistan’s wheat crop soars to new record, high tariffs cap imports: USDA

Improved yields are set to push Pakistan’s wheat production to a record-breaking 26.5 million mt, the USDA’s Foreign Agriculture Service said Thursday, noting that high import tariffs will likely insulate global markets from the increase.

The USDA’s local office in Pakistan upped its estimate for the 2017/18 crop to 26.5 million mt, in line with the government of Pakistan’s official estimate and 800,000 mt higher than the USDA’s figure in its December WASDE report.

The 2017/18 crop is set to be 900,000 mt higher than the previous marketing year, as yields extend from 2.78 mt/ha to 2.92 mt/ha due to favourable weather conditions during planting, increased fertilizer use, and sufficient reservoir levels for crop irrigation.

In addition to the high domestic production volumes, the USDA FAS explained high import duties and domestic prices offer little prospect for significant imports in the 2017/18 marketing year.

A 60% import duty keeps imports uncompetitive, even against costly local wheat, with further capacity for the duty to rise to as much as 150%.

Imports are set to come in at around 50,000 mt, some 20,000 mt higher than the USDA’s WASDE estimates but insignificant in terms of global trade volumes.