Rice & wheat Stocks Swell, But Export Ban May Not Be Lifted.

Stocks with the Food Corporation of India (FCI) and state agencies have swelled with record harvests over the last two years, but that does not mean the government will lift the ban on foodgrain exports in a hurry.

According to the latest food ministry data, total stocks of mostly wheat and rice was more than 59.13 million tonne at the beginning of this month, against the strategic and buffer stocks requirement of 21.2 million tonne. Rice stocks amounted to more than 27.76 million tonne, and the FCI had 31.37 million tonne of wheat in its warehouses, the data said. The government procures rice throughout the year from the farmers, while wheat is purchased only during the rabi or winter harvest.

Around 2 million tonne of foodgrain is allocated to states every month for distribution under the targeted public distribution system, and FCI keeps a buffer stock of grains for meeting exigencies.Due to food stocks far beyond the requirement, the FCI is now actually incurring storage expense.

A food ministry official told FE that excess stocks have been able to keep the price of wheat in the open market under check.However, despite having surplus wheat stocks, food and consumer affairs minister KV Thomas had recently suggested a cautious approach in allowing wheat exports as it could lead to a rise in the prices of essential food items.

“All angles have to be looked into and any decision on wheat export should not affect the present stabilised prices of essential commodities,” Thomas had stated. The government had imposed the ban on the wheat export in February 2007.

In anticipation of a bumper wheat crop, agriculture minister Sharad Pawar had supported limited exports of wheat to ensure that farmers get a better price for their produce. The country is well on course to harvest a record 84.27 million tonne of wheat in the 2010-11 crop year (July-June).

“The government will have to take a serious view as soon as possible. The government has set a buffer norm and we have stock more than the buffer norm. In this kind of situation, we must take a view (on exports),” Pawar said. “We have enough stocks and we can easily export 2 million tonne of wheat and rice,” he stated. A food ministry official said that an empowered group of ministers on food is expected to deliberate on the issue soon.

Besides Pawar, the Commission for Agricultural Costs and Prices (CACP) had recently suggested in its report that the government was sitting on excess foodgrain stocks worth R43,000 crore, and that the country can easily export 3-4 million tonne of wheat to benefit from high global prices.

Source : financialexpress.com