Lack Of Infrastructure Hinders Wheat Exports

Mumbai, Nov 9: | Updated: Nov 10 2003, 05:30am hrs
This years wheat production has crossed last years 67 million tonne level on good rains. In the year ahead, the output is expected to be around 78 million tonne with more acreage and better yields than last years, when the country experienced a worst drought. This year, prices, too, are said to be higher because of good demand from the South East Asian countries. This indicates good scope for wheat exports during the year ahead. Recently, the first consignment of wheat for the current fiscal is said to have been shipped from Vishakapattanam.

However, given the political hues of the wheat sector, exporters here say despite high production, the countrys wheat exports can hardly go up to around 6 million tonne, from 5 million tonne last year. Poor infrastructure and logistics are responsible for the small size of Indias wheat export market, they say. When pointed out that the commodity is being exported from the country every year anyway, one leading trader exclaimed that it happens on Ram Bharose. Price competitiveness is not the only thing essential for being present in the global wheat export market. Infrastructure, logistics and port facilities are also equally important, he said.

Our infrastructure and port facilities are not as conducive for exports as they should be, said the wheat trader, adding, This is one of the major reasons why the size of the countrys annual wheat export is around 5 million tonne.

Indonesia tops the list of importers of Indian wheat with 22.45 per cent share, followed by Yemen (14 per cent), the UAE (13 per cent) and Africa (10.75 per cent). Among other buyers are Bangladesh, Sri Lanka, the Phillipines, Vietnam, South Korea and Taiwan.

The government was forced to permit wheat exports in 2000 because of the stock accumulated over the years. Since the past three years, around 13 million tonne wheat has been exported. Last year, India exported around 5 million tonne, which, traders feel, is too small a market and given the constraints, a waste of time.

Wheat exports can go up to say six million tonne, at the most, exporters say.

The government wants to fill up the godowns of the public distribution system (PDS) ahead of the forthcoming elections. The available railway rakes are being used for this purpose. This is causing shortage of rakes for transporting wheat for the export market, say exporters.

Interestingly, one of the important aspects indicated by the traders was the presence of the export subsidy. Intrinsically, India is incapable of making its presence felt in the export market without subsides, traders maintain.

According to one of the leading exporter, the export subsidy at Rs 1,750 per tonne is cheaper for the government than bearing the huge carrying cost of around Rs 3,200 per tonne. What is more, the costs are bloated further with the quality of foodgrains deteriorating with improper storage facilities.