February 14, 2011

India's grain supply soars on bumper crop, export curbs

India's February grain stocks more than doubled on bumper harvests and rice and wheat export curbs, government sources said Friday (Feb 11).

On February 1, wheat stocks were at 19.4 million tonnes, more than double the 8.2-million-tonne target but lower than last month's 21.5 million tonnes.

India's food price index rose 13.07% in the year to January 29, government data on Thursday (Feb 10) showed.

But trade and industry officials believe India can afford select food exports.

"There is an imminent case for exports of all major food items as India has more than surplus stocks, while there is a strong global demand," said Atul Chaturvedi, chief executive officer for farm business at Adani, the country's biggest exporter of farm goods.

Overflowing grain bins have raised storage concerns, forcing the government to take steps to augment warehouse capacities.

Analysts say despite bulging stocks, India may continue with grain export curbs as Prime Minister Manmohan Singh's government is trying to bring a bill in parliament to further subsidise grains for the poor.

State-run Food Corp of India, the main grain procurement agency, buys wheat from local farmers between March and May.

The government buys rice and wheat from local farmers to build reserves for emergency, run various welfare programmes and protect farmers from distress sale.