March 27, 2012

India may cancel wheat, rice export plan to Bangladesh

As Bangladesh hasn't shown enough interest in picking up the grain, India will likely scrap the plan to export 500,000 tonnes of wheat and rice to Bangladesh from government stocks, two officials said Monday (Mar 26).

A ministerial panel is expected to decide on the export proposal later Monday.

The matter has gone back and forth for the last two years but the shipments haven't happened yet.

The two sides reached a price agreement about a year ago for the supply of 300,000 tonnes of parboiled rice and 200,000 tonnes of wheat.

Global wheat and rice prices softened soon after the agreement, which is likely why Bangladesh didn't pick up the grain, a senior Indian food ministry official, who didn't want to be named, said.

"We may consider exporting the same quantity to other friendly countries," one of the officials, who didn't want to be named, told Dow Jones Newswires.

As of March 1, India's wheat and rice stocks were nearly double the buffer stock requirement of 54.433 million tonnes. Last September, it lifted a ban on exports of non-basmati rice and wheat after three years to free up storage space.

Another official said the ministerial panel will also consider supply of an additional 26.5 million tonnes of grains for local subsidised sales, over and above previous supplies.

Separately, the panel will also consider extending a tax-free pulses import programme by one year to March 31, 2013 as well as continuing an export ban on pulses for the same period, he added.

India, the world's top producer and consumer of pulses, imports around three million tonnes of the protein-rich staple annually to bridge a shortfall in domestic production.