Govt May Lift Wheat Export Ban In April, May.

The government could decide as early as next month to lift a four-year-old ban on wheat exports, but analysts said the government, struggling to bring down prices, may lack the political will for such a move.

The world's second-biggest wheat producer and consumer banned exports in 2007 to bolster domestic supplies as bad weather hit crops.

This year it is heading for record production of around 82 million tonnes -- at a time when output problems for other producers have pushed global prices near to 30-year highs. India has more stock than it can store and some is rotting.

"We are thinking about it. A decision may be taken by April-end or May," junior farm minister Arun Yadav told reporters on Tuesday when asked if the government could lift the ban.

But traders remained sceptical about the government's ability to allow exports, given that its priority now was to bring down high food inflation as it goes into a series of state elections beginning next month.

"If exports lead to a rise in wheat prices even by a rupee the opposition is going to make an issue of it and the government could be in trouble," said Veena Sharma, head of Roller Flour Millers' Association.

"So even if we are going to see record production the government's risk appetite on issues relating to food stocks is very low because of political reasons."

Elections, seen as crucial for allies of the ruling Congress party, are due in at least five key states from next month.

Wheat prices continue to be influenced by poor weather in many regions, particularly the U.S. Great Plains. The U.S. Department of Agriculture issues a report on planting intentions on Thursday, which is likely to give the market greater direction.

An earthquake and tsunami that hit Japan earlier this month helped push benchmark wheat prices at the Chicago Board of Trade higher.

The government's purchases this year will be about 26 million tonnes out of total demand of around 76 million tonnes.

Traders said a decision to lift the ban on overseas sales, if taken, could coincide with the peak harvesting season which ends by mid-April. This is when the government confirms procurement for its supplies of subsidised wheat, providing more clarity on stocks and supplies.

"We are heading for a bumper crop. It looks like production will cross our current estimates of 81.47 million tonnes," Yadav added.

The minister also said the monsoon in 2011 could be normal.

Source : economictimes.indiatimes.com