Plan to export grains from central pool may be derailed

Among the options being considered by the government to absorb its huge stock of grains, is exporting these from the central pool. If implemented, this would mean for the first time in more than six years, India would tap the export market to liquidate its government inventories.

Food Minister K V Thomas said India was looking to export wheat from government stocks, and there were countries like Uganda, a few Gulf nations, Afghanistan and Pakistan, who needed wheat.

However, the proposal would not be easy to operationalise, given the global grain market, primarily that of wheat, looks dismal, and almost all major exporters have huge inventories. The quality of Indian wheat is low, compared to wheat from other major exporters. As on May 7, India’s grain stocks were estimated at about 71 million tones.

The major hurdle to the implementation of the plan would financing it, as the government’s economic cost of wheat is expected to be about Rs 18.22 per kg in 2012-2013, while the average global price of US wheat during January to March was about Rs 15.06 per kg, assuming a rupee stands at 54 a dollar.