Govt considers halting export of wheat from stockpiles

It may be discontinued amid growing expectations of a subnormal monsoon and the possibility of a drought-like situation this year

The government is considering halting the export of wheat from its stockpiles this year in the wake of weak global prices and to keep the grain for meeting domestic demand in the event of a drought.

To ease storage pressure, the previous government had allowed 2 million tonnes of wheat to be shipped out from Food Corporation of India (FCI) godowns at an average price of $260 a tonne. The target was to have been achieved this month.

"About 1.5 million tonnes wheat has been exported so far out of the total target of 2 million tonnes. No fresh tenders have been issued due to falling global rates," a senior Food Ministry official said.

The government's wheat exports may be discontinued amid growing expectations of a subnormal monsoon and the possibility of a drought-like situation this year. However, private wheat trade could be kept open, the official added.

As of June 1, state-run FCI held 41.6 RPT 41.6 million tonnes of wheat compared with the buffer norm of 40 RPT 40 million tonnes.

"My government is alert about the possibility of a subnormal monsoon this year and contingency plans are being prepared," President Pranab Mukherjee told the first joint sitting of Parliament on June 9.

The Cabinet Secretary recently asked secretaries of the food, agriculture and other ministries concerned to take steps to minimise the impact of a poor monsoon.

According to official data, FCI wheat has been exported at an average price of $275-289 a tonne so far, while global prices have fallen below this level.

World wheat export prices have remained under pressure on expectations of ample supplies in the year ahead.

The export price of soft red wheat has declined to $250 a tonne from $261 a tonne last month, according to the International Grains Council.

The government exported wheat mainly to Bangladesh, the Gulf and southeast Asian countries.