Swelling Stocks May End Curbs On Export Of Rice And Wheat.

Private traders may be allowed to export 3 million tonne of grain this year as stockpiles climb. A panel of ministers may consider a proposal on July 11 to allow private companies to ship 2 million tonne of wheat and 1 million tonne of non-basmati rice, officials said. The panel may fix minimum export prices for the grains, they added.Supplies from India may help cool global food prices tracked by the United Nations .

Rice surged to a record in 2008 after nations including India and Vietnam curbed shipments, spurring unrest from Haiti to Egypt. “This will impact prices of both wheat and rice globally,” Vijay Iyengar, managing director of Agrocorp International, a Singapore-based commodity trading company, said. “Indian grains will have a market in the Middle East, South and Southeast Asia.”

India banned private companies from shipping wheat in early 2007 and non-basmati rice in April 2008 to bolster domestic supplies amid a global food crisis.

Restrictions were eased allowing some quantities of wheat, rice and wheat products to be shipped to Africa and countries including Bangladesh and Nepal through state-run companies under government-to-government deals.

Wheat exports from India may accelerate a 20% decline in wheat futures in Chicago this year amid forecasts of increased supplies by the International Grains Council. Worldwide wheat and corn harvests will be 666 million tonne, 3 million tonne more than earlier forecast, because of an improving outlook in China and the US, the council said on June 30.

Wheat climbed 0.2% to $6.36 a bushel on Chicago Board of Trade, set for a 3.9% gain this week, the first for the most-active contract since the week ended May 20.

India likely harvested a record 86 million tonne of wheat in the year ended June 30, a 6.4% increase from a year earlier, Agriculture Secretary PK Basu said on June 13. Rice output likely totaled 94.11 million tonne, up from 89.1 million tonne, the Agriculture Ministry said in April.

The government, which buys grains from farmers at guaranteed prices and sells to the poor at cheaper-than-market rates, had stockpiles of 64 million tonne of wheat and rice as of July 1, compared with buffer and strategic requirement of 31.9 million tonnes, according to the FCI.

“India’s farm ministry is not pushing for exports as the nation needs to preserve grains to implement a new law that will guarantee food to the consumers,” Agriculture minister Sharad Pawar said on July 5, reversing its earlier position on overseas sales of wheat and non-basmati rice. Food minister KV Thomas said on June 29 that he was not against exports.

“India may need as much as 70 million tonne of rice and wheat to be supplied at subsidized rates to its citizens after the parliament approves the Food Security Bill,” Thomas said on June 17. The government’s current grains requirement is about 60 million tons for various welfare programs, he added.

“Rice exports from India will be profitable as global prices are rising over concerns about supplies from Thailand,” Vijay Setia, president of the All India Rice Exporters Association, said.

“We have demanded $700 a tonne as minimum export price for rice and it can certainly go at this price as a likely policy shift in Thailand may push up global prices,” he said.

Source : financialexpress.com