New Delhi: With wheat production expected to touch about 81 million tonne in 2009-10, the government is planning to export the foodgrain and some varieties of rice — first time in six years — to clear its bulging inventories.
The move could further cool prices in the global markets, where wheat is already down 70% from the year-ago peak. India is the world's second largest producer of wheat. Major global grain trading companies operational in India, like AWB, Glencore, Adani along with a host of private wheat traders, are expected to benefit from the move.
“The government would soon discuss the prospects for grain exports at a meeting of the empowered group of ministers scheduled for next week,” food and agriculture minister Sharad Pawar told reporters on Thursday. The eGoM is headed by finance minister Pranab Mukherjee. The announcement came on a day when the latest weekly food inflation again spurted to touch 17.87%, as prices of wheat, rice and vegetables continued rising.
The eGoM on food meets every month and its last meeting was on February 12.
India allows periodic export of wheat and rice to meet its strategic obligation on a government-to-government basis.
Correspondingly, the government could stop duty-free import of wheat beyond March 31. The zero-duty import benefit for wheat is to expire this month-end.
The government banned exports of wheat in early 2007 and prohibited overseas sales of common rice varieties in 2008 to control unprecedented rise in prices of essential commodities in the country.
India, the world’s second-biggest producer of wheat, is expecting a record harvest of almost 81 mt this year, thanks to a considerable expansion of area under crop in major growing regions of Punjab, Haryana and Maharashtra. According to official data, wheat has been sown in 27.81 million hectare so far compared with 27.58 million hectare in the same period last year.
Mukherjee also said sugar production in the 2009-10 crop season that started in October is expected to be more than 16 mt, much above the earlier projections of around 14.6 mt largely because of good output in Uttar Pradesh and Maharashtra, the two biggest sugar-producing states.
Source : Financial Express