With wheat stocks at the state-owned Food Corporation of India (FCI) and state government-owned agencies already above strategic and buffer norms, flour mill mowners have begun to demand an ease in ban on export of wheat products. Due to a poor crop outlook, the government had imposed a ban on wheat exports in February 2007 to control the skyrocketing prices of the essential foodgrain. However, with a bumper wheat output in 2008, the FCI and state-owned agencies managed to procure more than 22 million tonne against a target of 15 million tonne.
The demand for relaxing the curbs on export of wheat products like flour, has gained momentum with the ministry of agriculture statement on Thursday that wheat stocks with the government on April 1 2009 were expected to be 7.1 million tonne as compared to buffer norms of 4 million tonne. Besides, the statement also said that a strategic reserve of 5 million tonne of foodgrains (3 million tonne of wheat and 2 million tonne of rice) over and above the extant buffer stock, has also been created.
?The government must allow us to resume the export of branded flour packets of small quantitiers prior to the arrival of the new crop next year,? KK Kumar, chairman and managing director, Shakti Bhog Foods Ltd, told FE. He also said that prior to the export ban, the company had registered its brand in 40 countries mostly in the Middle East, the European Union and Canada for permission to export. ?Brands in value-added products of wheat should be allowed, while the ban on bulk wheat could continue as it could impact domestic prices,? Kumar said.
According to latest data provided by the FCI, the agency has close to 20 million tonne of wheat at its disposal and has around three to four months to clear stocks, apart from buffer norms and strategic reserves, as the FCI would resume procurement for the next year by April or May 2009. ?With the Punjab and Haryana having already exhausted their storage capacity, the government must decide on allowing the export of at least wheat products soon before the new crop arrives next year,? Vinod Kapoor, managing director, Chandigarh-based Kapoor Brothers Flour Mills, said.
Under the open market sale scheme launched by the FCI in October to sell 1 million tonne of wheat to bulk consumers, flour millers have already lifted around 2 lakh tonnes.