The firm trend in global wheat prices has prompted the Union Government not to rush with exports from its stocks.
“We are not in a hurry to export wheat,” said the Union Minister of State for Food, Prof K.V. Thomas. “We are looking at the international situation as prices in global market are firming up and getting better and better,” Mr Thomas told reporters on the sidelines of a commodity seminar organised by FICCI.
The Food Minister’s statement comes a day after the Cabinet Committee on Economic Affairs approved the export of 2 million tonnes of wheat from the Central stocks at a floor price of $228 a tonne (approximately Rs 12,400 a tonne). The move to dispose of excess stocks with Food Corporation of India through exports was mainly to create storage space for the wheat crop from the 2011-12 rabi season.
“Our idea is to get better price for exports,” Prof Thomas said, adding that the Government would not export the entire 2 million tonnes at one go.
Global prices zoom
Global wheat prices have shot up in recent weeks on dry conditions impacting production in countries such as Russia, Ukraine and Australia.
The Chicago Board of Trade (C-BOT) futures for July delivery ended higher on Tuesday at $7.82 a bushel of 27.215 kg. The September futures closed higher at $7.99 and December futures at $8.13 . The March 2013 futures closed higher on Tuesday at $8.26.
At current rupee exchange rate of 54.37 to a dollar, global wheat prices for delivery this month translate to around Rs 15,622 a tonne. In May, when the State Trading Corporation issued a tender for exports from Government stocks, the CBOT prices for July delivery were around $6 a bushel (or Rs 11,700 a tonne at then exchange rate of Rs 53 to the dollar). The maximum bid received by STC was at $230 a tonne.
Export trend
On Tuesday, the CCEA decided to set up an empowered committee under the chairmanship of the Commerce Secretary to decide the modalities of export such as determining the price from tender to tender and other operational issues.
The Government had opened up wheat exports in September last, after a gap of three years.
The export trend is sluggish with about 13 lakh tonnes being shipped out to countries such as Bangladesh and West Asia.