October 21, 2011

  

India's wheat export stays low

 

 

After a nearly four-year export prohibition was removed early last month, India only exported 21,585 tonnes of wheat because world prices have decreased more than local rates.

 

On September 9, the government lifted the ban on wheat exports which were imposed in early 2007, as the country had produced a record 85.93 million tonnes in 2010-11 crop year (July-June).

 

"The country has so far exported 21,585 tonnes," a senior Food Ministry official said.

 

Flour millers said that wheat shipments are not picking up due to unfavourable price situation in the global markets. They demanded government subsidy to boost shipments.

 

"The sentiment in the international market is bearish because the Ukraine government is planning to free wheat exports and there is also an expectation of better crop in Australia," Roller Flour Millers Federation of India (RFMFI) ex-president M.K Dattaraj said.

 

There is no price parity as the FOB (Freight On Board) price of India's wheat is high at US$300 per tonne against the Black Sea wheat at US$245-250 per tonne, he said.

 

"The current global price does not favour exports without subsidy. The cost of wheat at an Indian port is high and cannot be competitive in the world market," RFMFI Secretary Veena Sharma said.

 

The shipments could have improved if traders were allowed to source the grain from the government godowns, which are located near ports, she said.

 

Punjab Flour Mills Association President Naresh Ghai said whatever little exports has taken place so far has been sourced from Rajasthan, where there are no local taxes on procurement.

 

Exporters are not able to source wheat from Punjab and Haryana because private traders in these two states do not have surplus stock to offer besides local taxes are huge, he added.