Column : Forget disinvestment, think wheat
What if the government decides to sell 10 million tonnes of this food stock—in July, the Cabinet approved sale of 2 million tonnes but less than half of this has been exported so far. At the current global price of $313 a tonne, this could mean an inflow of R17,200 crore into the government’s coffers. Add to this another R2,400 crore based on the current carrying costs of R2,400 per tonne per year, and we’re talking of a number that’s just under R20,000 crore. Sell 20 million tonnes, and we’re talking of R40,000 crore into the finance minister’s coffers. Given the government doesn’t have storage capacity for around a tenth of its stocks, and we’re not even talking of the grain under cover and plinth, selling off 10 million tonnes will also free up valuable space for the next procurement season. That is, if the government doesn’t export the grain, the chances of it rotting are huge.
Why the government has not been able to get greater interest from exporters is not clear—in July, the CCEA had fixed a floor price of $228 per tonne for exports. Given how global prices have been shooting up, the scope for increased exports seems large. From $232 per tonne at the beginning of June, prices touched $340 by the end of July, fell to $307 by November 16 but are now rising again, to $313 yesterday. But if the government finds the bureaucracy