India, Pakistan may surpass wheat export records

India and Pakistan could be on track to beat their wheat export records and nearly eight million tonnes in surplus could reach the market.

It is likely that India, which will next week decide on whether to relax a four-year ban on mainstream wheat exports, will permit shipments of 1-2 million tonnes, the Canadian Wheat Board (CWB) said.

However, with harvest in the world's second-biggest wheat producing country expected to come in at a record 82.3 million tonnes, there is significant scope for additional trade. Although domestic consumption, of 78 million tonnes in 2009/10, is rising fast, India built up hefty stocks of grain through government support programmes - raising concerns of where to store the grain.

"India and Pakistan are on pace to challenge their all-time production records," CWB said. "India will have a significant wheat surplus and could export upwards of five million tonnes."

While India's food minister, KV Thomas, already pitched himself against wheat exports, CWB highlighted gains from exploiting international prices still near two-year highs. "Any upward tick in world prices increases the motivation to permit exports," CWB said.

Pakistan, which is set for a third successive bumper crop in 2011/12, reopened to exports in January, since it has achieved some success from competitive pricing compared with South East Asian countries against Australia, a big supplier to the region.

Two weeks ago, Pakistani wheat was quoted for export at US$310-315 a tonne, including freight, compared with US$325 a tonne for Australian feed wheat, and US$420-425 a tonne for prime-milling wheat. For Pakistan, to test its export record would mean shipments of more than two million tonnes, as recorded in 2007/08 and 2008/09. India reached its all-time high in 2003/04, with a 5.65 million-tonne figure.

Grain traders said that the delay on party of India to start wheat export has allowed Pakistan to take full advantage of the situation.