India dumps wheat on market
An Indian ministerial panel Thursday cleared a proposal to allow private companies to export 5.0 million metric tons of wheat by sourcing the grain from government stocks, Food Minister K.V. Thomas said.
This is the first time that India is allowing private companies to export wheat from government stocks.
The exports will need to be completed in the next three months, Mr. Thomas said.
As India is a big supplier of wheat in the international market, a rise in exports may weigh on global prices.
In July 2012, the government permitted state-run trading companies to export 2.0 million tons of wheat from its stocks. In January it said they could export another 2.5 million tons.
The government is trying to reduce its bulging grain stocks as it is expected to procure a record amount of wheat this season.
The government has been buying rice and wheat at high state-assured prices to support farmers' incomes and to build up stocks as it prepares to roll out a law to guarantee supplies of grains at cheap prices to the poor.
But finalization of the law has been delayed. The government is now looking at ways to reduce the pressure on storage.
India will likely produce a near-record wheat crop of around 92.3 million metric tons this season, the third straight year of a bumper harvest.
The country's grain stocks currently stand at about 66 million tons, more than three times the minimum volume to be maintained under government rules.
Write to Biman Mukherji at email@example.com
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(END) Dow Jones Newswires
March 07, 2013 08:04 ET (13:04 GMT)