Govt plays safe, rules out wheat exports till home prices tamed.

NEW DELHI: The Centre is likely to consider wheat exports only after the third advanced estimates of Rabi crop are out and food inflation cools off, overflowing godowns notwithstanding.

By that time the government also expects clarity on grain outgo on account the proposed food security law through a better fix on the number of eligible consumers , a government official said.

“The commerce department is in favour of wheat exports because of adequate availability but the government cannot take a decision before it is totally sure that the country’s needs in the coming months are covered,” an official from the commerce department told ET.

He added that wheat exports was a sensitive subject and the government did not want the public to panic. “We are waiting for the Rabi crop to come in and food inflation to fall further before deciding on allowing exports,” the official said.

The caution on exports is highlighted by low global wheat prices, making exports an economically unviable proposition at present.

Adding to the increased caution over any “premature” decision on wheat exports could also be the US Department of Agriculture’s (USDA) lowered wheat output estimate for India. It cut production estimate by 3.65% to 79 million tonnes for the current crop year from 82 million tonnes on crop damage due to extreme heat.

The third advance estimates are considered relatively more accurate since they take into account not only the harvest projections for rabi and kharif seasons of the year, but also the market arrivals of the merchandise.

The second advance crop production estimates had earlier pegged India’s food grain production for 2009-10 at 7.51% lower than the previous year. It placed wheat out put at 80 million tonne which is comparable to production in the previous year.

The third advance crop production estimates are expected by June. In June, the Met Department (IMD) is also expected to come out with its detailed second stage monsoon forecast indicating the kharif acreage and output projections for the year.

India had put a ban on exports of wheat in February 2007 following low production and a need to build adequate foodstock. The ban stayed on as food prices started moving up following a drop in world production.

Wheat buys reach 20.4 mt

Wheat procurement for the 2010-11 marketing year on Wednesday reached 20.44 million tonnes, down 1% over the same period last year, reports PTI from New Delhi. The Food Corporation of India (FCI), the nodal agency for procurement and distribution of foodgrains, had purchased 20.64 million tonnes of wheat in the same period last year.

Arrival of wheat has declined at mandis because private traders are buying the foodgrains directly from farmers, a senior government official said. Wheat procurement, which was higher by a phenomenal 40% over the previous year on April 13, has been exhibiting a declining trend - - finally showing a dip below the purchases made in 2009.

Source : The Economic Times