Govt Unlikely To Lift Export Ban On Wheat: Industry.

India, which is heading towards harvesting a record wheat output of 81.47 million tonne this year, is unlikely to lift export ban on the grain despite scope for high prices on fears of tightening global supply owing to concerns of Chinese wheat crop, according to industry experts and anaysts.

The Food and Agriculture Organisation (FAO) recently alerted about risk to Chinese wheat crop due to drought conditions and its likely impact on global supply and prices.

Although the situation provides a window of opportunity to India, which has suspended wheat export since 2007, but the domestic industry experts and analysts feel that the government may not consider the overseas sale of wheat until the entire crop is harvested.

"We are insulated. Neither we are exporting nor importing any wheat," the Roller Flour Millers Federation of India (RFMFI) former President M K Dattaraj told PTI.

Although there is an estimate of a record production, "I don't think the government will allow exports till June", until the crop is harvested and the government meets its procurement target, he said.

A similar view was expressed by RFMFI Secretary Veena Sharma who expressed doubt on whether the government will consider export of wheat to China if such a demand is made "because it is not viable for us without subsidy".

Also, China's wheat demand would be in bulk unlike Sri Lanka and Bangladesh, she said, adding the Commerce Ministry is pushing for export of the grain.

A senior government official said that the Commerce Ministry is batting for export of wheat and is likely to discuss the issue in the forthcoming meeting of empowered group of ministers on food.

However, the Agriculture Ministry is against such recommendation as it feels risks cannot be taken at the growing stage of the crop, sources said.

Also, traders have not been able to export the entire 6.5 lakh tonne of wheat products so far, they added.

Presently, global wheat prices are firming up slightly and domestic prices could flare up if exports happen, an analyst with commodity brokerage firm SMC Global said.

At Chicago Board of Trade, wheat futures for March delivery was ruling firm at $8.78 a bushel today.

India's overall inflation has eased slightly to 8.23% in January due to fall in wheat and sugar prices.

As on January 1, the government godowns have 21.5 million tonne of wheat, against the buffer norm of 11.2 million tonne.

Source : smartinvestor.in