July 6, 2011


India's farm ministry not pushing for grain exports



India's farm ministry isn't pushing for grain exports, Farm Minister Sharad Pawar said on Tuesday (Jul 5), as he reversed his previous stand with food inflation remaining sticky and as the government will require higher supplies of rice and wheat for its welfare programs.


India's food-grain stocks are at an all-time high of 65.47 million tonnes, about two-and-a-half times the annual requirement for state welfare programs. Still, the government is cautious on exports due to inflation fears and its plan to enact a law that seeks to expand the supply of subsidized grains.


"We are not in a position to push for exports as we are waiting for the national food security bill, which is likely to come up in parliament," Pawar said.


This is a marked change in the stand of Pawar, who as late as last month favored exports of rice and wheat, citing surplus stocks and estimates of a bumper harvest this crop year.


On Tuesday, he told reporters that the government will decide on its policy on exports "after we decide on the price and quantum of food grain to be distributed" under the food security law.


India prohibited exports of wheat in 2007 and rice a year later to control local prices. It continued the ban since, except to allow small shipments to neighboring countries on diplomatic requests, even after facing a shortage of warehouses to stock the grains.


Meanwhile, a panel of ministers is scheduled to meet later this month to decide on grain exports.


The farm minister said the panel is expected to meet on July 11 or July 12 to review the grain stock position. He didn't say whether it will consider exports.


Food Minister K.V Thomas has recently said he was open to considering exports of up to three million tonnes of wheat and rice.


Farm Minister Pawar's change of stance comes also after the weather department cut its forecast on monsoon rainfall to slightly below normal. For some 60% of India's farmlands, rains are the only source of water and a weak monsoon could hurt farm output.


Pawar said there won't be any impact on crop output if the rains were good in July, the month when a third of the monsoon rain falls.


The seasonal rains were above average during June, but may be erratic in the first few days of July, according to weather officials.


Pawar said it is too early to talk about the impact of a below-normal monsoon on farm output, as sowing of summer crops such as rice, oilseeds and pulses goes on until the third week of August.


Barring a few provinces, monsoon rains have been good across the country until the end of June, which will aid plantings, he added.


Sowing of oilseeds, especially soy, is progressing well, while that of rice is expected to pick up soon, the minister said.


Farm Secretary P.K. Basu said on Monday (Jul 4) that India's food-grain output in the crop year that started July 1 will exceed the government's estimate and reach a record 245 million tonnes.


India is targeting a rice output of 102 million tonnes and wheat production of 85 million tonnes, Basu said.

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