February 16, 2012

State-run trading companies as well as state-backed cooperatives have been allowed by Indian ministerial panel to export wheat and common-grade rice from the local market, three food ministry officials said Wednesday (Feb 15).

The decision was made last week but wasn't officially announced, one of the officials, who didn't wish to be named, told Dow Jones Newswires.

The move is likely to increase grain shipments from the world's second-largest rice and wheat producer. State-run PEC Ltd., State Trading Corp. of India and MMTC Ltd. will likely gain the most from the move.

India lifted an export ban for private traders on September 9, but hadn't extended the policy to state-run trading companies.

From September 9-February 10, India exported 2.75 million tonnes of common-grade rice, surpassing Thailand and Vietnam to become the world's top rice exporter during the period, officials said.

Wheat exports during the same period totalled 507,000 tonnes, government data showed. Wheat exports have been slow because local prices have mostly been higher or on par with international rates.

Shipments by state-run trading companies are likely to be smaller than those of private companies because the state companies are required to follow cumbersome procedures. India has allowed exports to resume because domestic stocks are sufficient and the country is expecting a record food-grain output of 250.42 million tonnes.