December 17, 2012

In the 2012-13 marketing year (MY), India's wheat export is likely to reach six million tonnes on the back of firm global prices.

"With the current tight open market supplies of wheat, private wheat exports are likely to come down significantly in the coming months. Consequently, we continue to estimate MY 2012-13 (April-March) exports at six million tonnes, which includes three million tonnes each of government and open-market wheat," USDA said.

"With export prospects looking favourable on expected firm international wheat prices through the first quarter of calendar year 2013, the government most likely will further augment the government-held wheat export quota," it added.

The government wheat is currently fetching good export rates compared to the Public Distribution System (PDS) wheat price of INR2,000-6,100 (US$36-110) per tonne, Minimum Support Price (MSP) for MY 2012-13 of INR12,850 (US$234) per tonne and open market sale price for bulk consumers in most states, it said.

The government's decision to export two million tonnes of wheat from central stocks fetched a rate in the range of US$296.70-319.50 per tonne. In July this year, the government had allowed export of two million tonnes of the grain from central pool stocks of Food Corporation of India (FCI) through central public sector undertakings (CPSUs) like STC, MMTC and PEC.

Last week, Commerce Secretary S R Rao had said the Food Ministry will move a proposal for allowing export of an additional 2.5 million tonnes of wheat from the central stocks in order to ease the storage crunch being faced by the country due to an all-time high production.

India harvested an all-time high wheat crop of 93.90 million tonnes of wheat in the 2011-12 crop year (July-June). The government has a wheat stock of 37.65 million tonnes as of December 1, 2012, which is more than double the stipulated buffer and strategic stock requirement of 11.2 million tonnes as of January 1, 2013. United Nation's body, Food and Agriculture Organisation has pegged India's wheat exports to touch five million tonnes in the 2012-13 marketing year.