NEW DELHI: India is considering selling wheat to states in Africa, the Middle East and neighbours such as Afghanistan and Pakistan, its food minister said, to cut its huge stocks as lower global prices deter exports and keep the domestic market in surplus.
India, the world’s second-biggest wheat and rice producer, lifted a ban on exports in September, as bumper harvests filled warehouses to overflowing.
Since then, Indian traders have exported 4.2 million tonnes of rice, mainly to the Middle East and Africa, but have not sold much wheat given unattractive international prices.
“There are some countries like Uganda, the Gulf, Afghanistan and Pakistan which need wheat,” Food Minister K.V. Thomas told reporters on Thursday.
India had around 19.9 million tonnes of wheat in government warehouses on April 1, nearly five times the official target of 4.0 million tonnes for the quarter ending June 30, government sources said last month.
Rice stocks for the same period were 33.3 million tonnes against a target of 12.2 million tonnes.
“We are looking at a number of proposals to reduce government stocks,” Thomas said, adding a panel set up to look at the issue of surplus stocks was examining whether to sell grain under diplomatic deals.
July wheat futures on the Chicago Board of Trade rose 1.1 per cent to $6.06-3/4 a bushel on Thursday, after dropping 2.4 per cent in the previous session.
India has exported only about 830,000 tonnes of wheat since September when the government freed up exports.
Thomas said the possibility of extending incentives to wheat exports was also being examined.
Last year’s second straight normal monsoon rains combined with attractive support prices paid by the government resulted in a record output of grains in India, but there was huge wastage due to lack of storage facilities in the country.
“Although we are adding storage space, foodgrain stocks are very high due to repeated bumper production which is a result of better prices being paid to farmers,” Thomas said.
As part of the strategy to get rid of the bulging stocks, the federal government has been allocating grains to states.
Thomas said an extra 17.5 million tonnes of wheat could be allocated to the states to meet demand for welfare schemes.
Separately, the minister said the Indian government would issue a formal order removing the limit on sugar exports later on Thursday.
Earlier this month, a ministers’ panel freed exports of the sweetener from the world’s second biggest producer, adding pressure to global prices.
India could export another 1 million tonnes of sugar after freeing exports given unattractive prices, pushing total shipments to 4 million tonnes this year in an over supplied global market.
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