Wheat exports to cross 4 million tonne in 2001-02

Ahmedabad, May 16

India’s wheat exports in the fiscal year 2001-02 may surpass four million tonne on strong demand from South East Asia and the Middle East, the chairman of Adani Exports Ltd, a key commodity trading firm in the country said on Wednesday.

India, which began wheat exports last October after a gap of nearly three years, is under pressure to trim its bulging stocks, estimated at 30 million tonne at the end of April. The Centre has set an export target of five million tonne for 2001-02 after successfully exporting about 1.6 million tonne from October to March. The government is required to maintain a buffer stock of only four million tonne.

"It won’t be difficult to export four million tonne because there is still good demand for Indian wheat," Mr Gautam Adani, chairman, Adani Exports Ltd, said. The firm has shipped 415,000 tonne of wheat since October 2000 to countries such as South Korea, the Philippines, Indonesia and the Middle East, he added.

"Demand for Indian wheat this year could also be buoyed by an expected decline in US wheat production," he said. Mr Adani said his company was able to command a premium on its shipments because it ensured better quality than most others in the business through effective cleaning of grains meant for exports. "We have been getting a price of $106-107 per tonne on a free-on-board basis compared with about $103-104 per tonne averaged by other exporters," he said.

The Food Corporation of India (FCI), which supplied wheat to state-owned trading firms at Rs 4,150 per tonne till April 30, has since thrown open the trade to private groups. A tender floated by the FCI to sell wheat for exports in 2001/01 is slated to close on May 25.

Mr Adani said the government’s decision to offer wheat for exports through a tender could dampen the process because of stringent conditions laid down by the FCI for participants. According to the FCI tender notice, participants have to bid for a minimum of 50,000 tonne and furnish hefty bank guarantees.

"The whole procedure for buying wheat from FCI has been made cumbersome and the tender is expected to get a tepid response," Mr Adani said. Though the tendering process was intended to keep small players out of the export market and reduce the risk of the grain being routed back into the domestic market, it needed further fine-tuning, he opined. "The practice of routing exports through state-run firms is a better idea and hopefully the government will come back to it," he said. Earlier, trading firms could export wheat through government-nominated agencies such as MMTC Ltd, State Trading Corporation (STC) and PEC Ltd paying them a fixed commission. (Reuters)