Wheat exports feasible as global prices firming up: FCI

Amid demands from traders to cut floor price of government wheat for exports, Food Corporation of India (FCI) today said global price of the grain is firming up and it is still feasible to undertake shipments.

Last month, the Centre had allowed export of additional 5 million tonnes (MT) wheat (of 2011-12 crop) from its godowns via private trade to ease storage burden. The export allocation was to be done via bidding process with floor price set at $274 per tonne (Rs 14,840) plus 12.5 per cent of local taxes.

"Traders are demanding reduction in the floor price. But currently, our wheat is sold at $304-306 per tonne, while Australia and the US wheat at $260 and 270 a tonne. Why our wheat is purchased above Rs 300 level? It is still feasible," FCI Chairman and Managing Director Amar Singh told PTI.

He noted that the global wheat prices fell sharply in the last one month but have started firming up now. "If international prices remain firm above $300 a tonne, it is feasible to export," he said.

The FCI has floated a tender for empanelment of traders for export of 5 MT of wheat. These empanelled traders will then participate in the FCI wheat tender to be issued next week, he added.

"We will issue tender for sale of wheat (2011-12 crop) to private exporters next week. We will sell wheat to the highest bidder among the empanelled traders," Singh said.

When asked what if it receives poor response to the tender, the FCI chief said, "We have 40 lakh tonnes of wheat from the 2011-12 crop. If exports do not happen, we can supply each month 7-8 lakh tonnes of wheat through PDS and clear it."

In a recent report, the US Department of Agriculture (USDA) had emphasised that India will have to explore measures for improving the viability of exports of FCI wheat given the historically unprecedented pressure of massive grain stocks and lack of sufficient storage space.

The report had also warned that expected foodgrains stocks of 90 MT by June 1 on higher procurement would pose an unprecedented storage crisis for the government. The current storage is estimated at around 71 MT.

Wheat production is expected to surpass last year's record of 93.90 MT in 2012-13 crop year (July- June).