Grain Export Growth Eases Fci Burden

With foodgrain exports touching nearly 5.8 million tonnes, the stockholding of the Food Corporation of India (FCI) has declined marginally.

According to official estimates, the total foodgrain stock with the FCI on January 1, 2002, was around 58 million tonnes, against nearly 62 million tonnes in July 2001. The inventory comprises around 32.4 million tonnes of wheat and 25.62 million tonnes of rice.

However, even at the reduced level, total stocks exceed the buffer stocking norm by over 41 million tonnes. These norms require the government to hold only 16.8 million tonnes of foodgrains -- 8.4 million tonnes each of wheat and rice -- in its coffers on January 1 every year for the purpose of food security. Besides, the central grain pool is slated to swell substantially again after the ensuing rabi marketing season, which begins in April. The estimates made by the FCI indicate that the central and state-level grain procurement agencies might have to buy over 20 million tonnes of wheat under their price support operations.

The export of wheat and rice, which had virtually stopped because of the domestic prices being above international prices, have resumed after the government started supplying grains to the exporters at cheaper rates. This, together with the marginal firming up of the international grain market, has made Indian wheat and rice price competitive.

While most of the rice being exported by India is for table purposes, wheat is generally being bought by importers as animal feed.

The total export of wheat since November 2000 is estimated at around 4.3 million tonnes. In the case of rice, which the FCI started supplying to exporters at reduced rates from the beginning of the current fiscal, exports so far are estimated at a little over 1.4 million tonnes.

The prices of the FCI wheat and rice meant for export are revised periodically, taking into account the economic cost -- acquisition cost plus all other overhead expenses.

However, reacting to the suggestions made by grain exporters, the government yesterday decided to set the prices on a quarterly basis and announce them at least 45 days before the beginning of the quarter. It will also give an additional one month to exporters for lifting the grains. This will help exporters in securing orders and planning their shipment schedules.

The food ministry has decided to set up a standing committee under the chairmanship of the food secretary to hear the problems of grain exporters and take on-the-spot decisions. It will include senior officials of the food and public distribution ministry and representatives from the FCI.

The government has accepted the exporters