Wheat export tender only to assess market, justifies govt

New Delhi, June 6: IN the wake of a poor response to the tender for wheat exports, government has said it was floated only to assess the market and the trade price would be fixed by the high level inter-ministerial committee (HLC), which could not be termed as subsidy.

“The tender has been floated for wheat exports in order to gauge the market trends, which will help the HLC in arriving at a reasonable base price for exports,” Food Minister Shanta Kumar said.

He said the policy of providing wheat to exporters at rates less than the open market price could not be termed as subsidy.

“It would be incorrect to infer the policy of fixing the base price as a subsidy, as this was aimed at obviating the adverse impact on exports due to market fluctuations,” he added.

It was not subsidy because the government was not purchasing wheat specifically for exports but only offloading stocks already in its possession to save the carrying cost.

He said the carrying cost at the rate of Rs 2200 per tonne for 50 lakh tonne wheat stood at Rs 1,100 crore and the export move was only to reduce expenditure and ensure funds availability to build better grain infrastructure.

Mr Kumar expressed confidence that the ongoing process would help achieve the five million tonne export target for the current fiscal.

Under the earlier policy adopted for rice, the tendering process was time insensitive, as by the time they fixed the price, market conditions changed.

Referring to the present mechanism, the minister, however, saw no contradiction in directly fixing a price for rice exports, while the tender process was adopted in case of wheat.

He said in any case the price would be fixed by the high level committee, keeping the international market situation in mind, he added.

-- PTI