A FCI official told FE that after the tendering process came to an end on Monday in key-growing states of Punjab and Haryana, there was no query from private trade for exports of wheat.
It would now force the government to revise the base rate for exports, which was fixed at R1,484 a quintal (around $ 270 a tonne) by the FCI.
The wheat was to be exported from the corporation's 2011-12 stocks. The government had decided to exports wheat from FCI stocks for creating storage space for the new crop being currently procured by agencies.
Prior to the beginning of the wheat procurement drive for the current season (2013-14) on April 1, the FCI had grain stocks of more than 22 million tonne, which was far in excess of the strategic reserve and buffer stocks norms.
Traders said at the current base rate, the exports price of wheat from India would work out around $315 a tonne after including freight on board. At the same time, the global price is currently ruling around $ 285 a tonne.
With plenty of wheat available with farmers at present, base export prices fixed by FCI is expensive and the government must reduce the cost of grain for ensuring exports, a FCI official said.
During last one year, state-owned trading agencies such as PEC and STC have exported 3.6 million tonne of wheat from FCI reserve.
However, FCI ministry officials said a reduction in export prices of wheat would have to be taken by the Group of Ministers (GoM) as the corporation has been incurring huge costs for storing wheat.
"Our procurement policy is open-ended. We lift excess grain against requirement, thereby incurring huge storage cost," a senior FCI official told FE. FCI has been incurring nearly R3,000 crore annually on storing huge wheat stock, which eventually adds to the food subsidy bill of the government.
In addition, the corporation last year gave R1,285 per quintal to farmers for procuring a record 38 million tonne of wheat. FCI also incurs other costs such as transportation cost and taxes of R200 a quintal. In the current year, FCI is procuring wheat at R1,350 a quintal from the farmers.