Traders May Not Benefit From Wheat Export.

The government move to lift the fouryear-old ban on wheat export is unlikely to make a major impact on domestic prices as Indian prices are not at parity with global prices. Traders feel that the best parity in export of wheat will come for Rajkot traders where the prices are ruling at Rs 1,100 to Rs 1,110 at mill delivery.

"Traders in Kota and Indore are also expected to benefit as distance from these markets to Kandla port will be less. However, for traders in Uttar Pradesh's wheat growing belt of Bareilly and Shahjahanpur, it will not be at parity owing to increased wheat prices at Rs 1,200 to Rs 1,220 per quintal excluding transportation cost," said a Mumbaibased market trader who added that major destinations would include South Africa , Dubai and SAARC countries.

Narendra Thakkar, a grain trader from Nadiad in central Gujarat, said the prices were stable and were unlikely to increase as there was a bumper stock in the state. On the NCDEX, spot price of wheat in Rajkot was firm at Rs 1,124.15 a quintal, in Delhi it was Rs 1,193 and in Karnal it was Rs 1,333.45. On Saturday at the NCDEX, wheat future for delivery in July strengthened by 1.34% to Rs 1,183 per quintal with an open interest of 13,980 lots.

The wheat new for delivery in August weakened by 1.31% to Rs 1,208 per quintal with an open interest of 34,560 lots. India imposed the ban on wheat exports in 2007 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 stock of wheat and rice stood at 65.4 million tonne and 37.8m million tonne respectively, according to the Ministry of Consumer Affairs, Food and Public Distribution. Domestic prices are stable and there is no excitement of export as international prices are weak, said Narendra Gupta, owner of LNG Agri Commodity in Delhi's Naya Bazar market.

Source : economictimes.indiatimes.com