India has revealed plans to allow additional wheat exports to cut huge stocks at government warehouses and make room for new harvest
After lifting a four-year ban on wheat exports by private traders in 2011, last year the government approved exports from its overflowing warehouses.
Approval of yet more exports by India, the world’s biggest wheat producer behind China, will help buyers in the Middle East and Africa with other leading suppliers Russia and Australia facing a decline in output.
Indian food minister KV Thomas said, “We are considering some more exports. That is the best way to lower your huge surplus stocks when world prices are good.”
Despite allowing wheat exports from government warehouses, the state-run Food Corp. of India (FCI), the main grain procurement agency, has been struggling with mounting stocks of rice and wheat, thanks to bumper harvests since 2007.
Wheat stocks at government warehouses on 1 January 2013 were more than four times the official target for the quarter ending March.
Thomas added that the government was also weighing the option of allowing private traders to buy wheat from FCI stocks and export.
Currently, the government has been exporting wheat from its warehouses through state-run trading firms such as MMTC Ltd and State Trading Corp.
Directorate of Wheat Research chief Indu Sharma said this year’s wheat harvest, which starts from March, will be likely to exceed the previous year’s level if temperatures do not rise in end-February and March.