India's trade ministry favours wheat exports

India's trade ministry is in favour of wheat exports as the country has a huge surplus, but the decision to lift the three-year old ban on overseas sales of the grain lies in the farm ministry.

"We are in favour of wheat exports considering the good wheat harvest, but the final decision will be taken by the agriculture ministry," Trade Secretary Rahul Khullar said.

India's 2010 wheat crop, currently being harvested, is expected to soar to 82 million tonnes and exceed local demand for the fourth consecutive year. Wheat supplies had swelled to 16.1 million tonnes on April 1, four times the target.

India stopped exports of wheat in early 2007 to ensure smooth domestic supply at reasonable rates, but food prices have risen sharply since the failure of last year's June-September monsoon.

Widespread protests against rising food prices have made the government cautious about any move to ship out grain even though the country has a huge wheat surplus.

While the government has already allowed state-run firms to ship small quantities of wheat to neighbours Sri Lanka and Nepal, analysts said India must export more wheat to accommodate the new crop as it is running out of storage space.