July 18, 2011

 

India's domestic wheat prices unaffected by export ban lift

 

 

India's move to lift the four year-old ban on wheat exports is unlikely to make a major impact on domestic prices, as Indian prices are not at parity with global prices.

 

Traders feel that the best parity in export of wheat will come for Rajkot traders, where prices are INR1,100-1,110 (US$24.67-24.90) at mill delivery.

 

Narendra Thakkar, a grain trader from Nadiad in central Gujarat, said the prices were stable and were unlikely to increase as there was a bumper stock in the state.

 

There was little excitement over the lifting of the export ban as international prices are weak, said Narendra Gupta, owner of LNG Agri Commodity in Delhi's Naya Bazar market.

 

India imposed the ban on wheat exports in 2007 to stabilise domestic prices and contain food inflation in the country. In 2010 wheat production reached 82.4 million tonnes and rice production reached 95 million tonnes.

 

As of June 1, the country's stock of wheat and rice stood at 65.4 million tonnes and 37.8 million tonnes respectively, according to the Ministry of Consumer Affairs, Food and Public Distribution.

 

On the NCDEX, the spot price of wheat in Rajkot was firm at INR1,124.15 (US$25.22) per 100 kilogrammes, in Delhi it was INR1,193 (US$26.76), and in Karnal it was INR1,333.45 (US$29.91). On Saturday (Jul 16) at the NCDEX, wheat futures for delivery in July strengthened by 1.34% to INR1,183 (US$26.54) per 100 kilogrammes with an open interest of 13,980 lots.

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