India Grain Prices Favour Exports.

Indian wheat and rice are competitively priced to enter the global market if government lifts the ban on exports, say traders. However, with rising cost of transportation, final export sales would depend on the ports through which the cargoes would be sent.

"The best parity in wheat export will come for Rajkot traders where prices are ruling at Rs 1,100 to Rs 1,110 per quintal at mill delivery. Traders in Kota and Indore are also expected to benefit as distances from there to the Kandla port will be less. However, traders in Uttar Pradesh's wheat-growing belt of Bareilly and Shahjahanpur will lose out due to increased wheat prices at Rs 1,200 to Rs 1,220 per quintal excluding the transportation cost," said a Mumbai-based trader who added that major destinations would include South Africa , Dubai and Saarc countries.

However, rice exporters and traders are pessimistic on exports. India imposed a ban on export of wheat in 2007 and non-basmati rice in 2008 to stabilise domestic prices and contain food inflation in the country. In 2010, wheat production touched 82.4 million tonne and rice production at 95 million tonne. As on June 1, the country's wheat and rice stock stood at 65.4 million tonne and 37.8 million tonne respectively, according to the Union ministry of food and public distribution.

On Friday, Union food minister KV Thomas said the government favoured export of three million tonne wheat and rice. Wheat export was to take place through private trade and non-basmati rice export through FCI godowns. "Export of non-basmati rice through FCI godowns is not viable as the quality is very poor. The government should allow private traders to enter the market," said Rice Millers Association president Ashok Aggarwal. He added that the Indian rice would be imported by SAARC countries and African nations.

Wheat traders said the government might allow export of 2 million tonne wheat through PSU trading companies MMTC and State Trading Corporation. "With the National Food Security Bill being formulated and expected to be finalised by this week, the government is likely to increase grain procurement from the current 40 million tonne to around 60 million tonne. If this happens, exports will remain negligible," said Narendra Gupta, owner of LNG Agri Comm, a grain trader in Delhi's Naya Bazar market.

Source : economictimes.indiatimes.com