February 16, 2011

 

India not likely to lift restriction on wheat exports

 

 

India is unlikely to lift its export ban on wheat amid anxieties on the drought-afflicted Chinese wheat crop and its impact on tightening global supply, according to industry experts and analysts.

 

India is heading towards harvesting a record wheat production of 81.47 million tonnes this year.

 

The Food and Agriculture Organisation (FAO) recently alerted about risk to Chinese wheat crop due to drought conditions and its likely impact on global supply and prices.

 

The situation provides a window of opportunity to India, which has suspended wheat export since 2007, but domestic industry experts and analysts feel that the government may not consider the overseas sale of wheat until the entire crop is harvested.

 

"We are insulated. Neither we are exporting nor importing any wheat," the Roller Flour Millers Federation of India (RFMFI) former president M K Dattaraj said.

 

Although there is an estimate of a record production, "I don't think the government will allow exports till June, until the crop is harvested and the government meets its procurement target," he said.

 

A similar view was expressed by RFMFI secretary Veena Sharma who was doubtful on whether the government will consider export of wheat to China if such a demand is made, because it is not viable without subsidy.

 

Also, China's wheat demand would be in bulk, unlike Sri Lanka and Bangladesh, she said, adding the Commerce Ministry is pushing for export of the grain.

 

A senior government official said that the Commerce Ministry is batting for export of wheat and is likely to discuss the issue in the forthcoming meeting of empowered group of ministers on food.

 

However, the Agriculture Ministry is against such recommendation as it feels risks cannot be taken at the growing stage of the crop, sources said.

 

Presently, global wheat prices are firming up slightly and domestic prices could flare up if exports happen, an analyst with commodity brokerage firm SMC Global said.

 

As on January 1, the government godowns have 21.5 million tonnes of wheat, against the buffer norm of 11.2 million tonnes.