Review of ban on wheat export in Mar

Written by Commodities Bureau | Agencies | New Delhi | Updated: Jan 16 2009, 05:49am hrs
Buoyed by bulging stocks and a good wheat harvest expected in 2009 for the second consecutive year, the central government on Thursday indicated that it is was willing to review the export ban on wheat in March. If the ban is lifted, then it would be for the first time in around two years that traders will be able to sell wheat outside India.

Earlier, the government showed signs of its willingness to relax the export ban by setting aside 2.0 million tonne of wheat from its stocks for government-to-government exports. The sowing of Rabi crops is progressing very well. We will definitely reach last years figure and may even cross it, Pawar told reporters on Thursday on the sidelines of a function, adding that the government would review the ban on wheat exports in March.

India banned exports of wheat and wheat products in 2007,following a sharp fall in governments annual foodgrain procurement because of good open market prices and lower production. However, falling inflation and rising stocks have put the government under immense pressure to ease some of the curbs on free exports. The Wholesale Price Index-based inflation has dropped to below 6% in recent weeks after climbing to double-digit figures in early 2008. Lately, the government has relaxed the restrictions on export of corn, edible oils and expressed its willingness to consider the ban for other crops in the light of changed global and local market scenario. The bumper wheat production in 2008 has also made the task easier.

India produced more than 78 million tonne of wheat in 2008. Consequently, government granaries are brimming with foodgrains. According to official estimates, wheat stocks as on April 1, 2009 should be around 9.17 million tonne, as against a buffer requirement of 4.0 million tonne, while rice stocks as on October 1, 2009 are estimated to be around 7.37 million tonne, as against the buffer requirement of 5.2 million tonne.

Officials expect that wheat production in 2009 could match last years record harvest if the weather remains conducive during the crop-growing stage. According to the latest government data, wheat has been sown on around 27 million hectare, marginally more than last year. Meanwhile, the minister also said that the Cabinet was likely to take up the issue of minimum support price for Rabi crops at next weeks meeting.

The Commission for Agricultural Costs and Prices, the nodal agency that determines the minimum support prices of agricultural produce, has recommended that the price of wheat be set at Rs 1,080 per quintal, around Rs 80 more than last year. A rise in the minimum support price encouraged farmers to sell grain to official agencies, and helped the government procure a record 22.6 million tonne last year.