January 21, 2013

India to see increase in wheat exports

India could see rising wheat exports as the country's output is expected to reach a record high for the seventh year.

An unusually cold spell in northern India in December and January has been a boon for wheat shoots, and farmers are expected to harvest another bumper crop in the coming months.

While this is good news for farmers, the ample harvest could create a problem for the government, whose warehouses are overflowing with stocks from previous years.

The government has announced that it will allow 2.5 million tonnes of wheat to be exported this year - a half-million tonnes more than last year. However, the Food and Agriculture Organisation estimates that exports could nearly double to five million tonnes.

The government buys wheat from farmers every year to protect them from market fluctuations and to create a buffer stock for its population. Still, it has faced heavy criticism for allowing food grains to rot because of inadequate storage facilities. Food experts have urged the government to export surplus food grains or use them to feed the poor.