Govt should consider lifting wheat export curb: Finmin report.

New Delhi, Sep 17 (PTI) The Finance Ministry today said curb on wheat exports should be lifted so as to gain from the global scarcity that has been created due to production loss in major producing nations like Russia and Ukraine.

"If India could look at easing wheat export curbs currently in place, subject to the 2010-11 wheat production prospects, it may be in a position to benefit from global wheat situation with competitive prices," the department of Economic Affairs said in its Monthly Economic Review.

India is the world''s second largest wheat producer and it contributes to around 12 per cent of the global production.
It said the country''s wheat production prospects are buoyant due to a good monsoon and the centre already has a buffer stock beyond the minimum threshold.

"The discomfiting fact is that food inflation still continues to be cause of concern. The weekly inflation in wheat for the week ending August 28 remained at 7.04 per cent compared to 3.41 per cent a year ago," the review said.

India''s food inflation crossed the 15 per cent mark for the week ended September 4, with the onset on a new index, calculated on the 2004-05 price base.

The government had banned wheat exports in October 2007 and non-basmati rice from April 2008 to ensure supplies in the domestic market and check the price rise. However, the ban has been relaxed from time-to-time on diplomatic grounds.

In May, four lakh tonnes of wheat were allowed to be shipped to Bangladesh, followed by an additional one lakh tonne in August.

Foodgrain stocks have increased after four successive good harvests of wheat but the government, struggling to tame inflation, has not allowed wheat and rice exports.

The country had a wheat stock of 33.6 million tonne in July, up from 17.1 million tonne a year ago.

Indian farmers harvested 80.71 million tonnes of wheat in 2009, marginally lower than an earlier estimate of 80.98 million tonnes, according to government data.

Major wheat producers like Russia and Ukraine have suffered production loss of up to 25 per cent this year due to high temperatures, leading to heat wave and forest fires.

In places like Pakistan, Canada and South-East Europe, heavy rainfalls and floods have played havoc with the crops.

"The world wheat stocks at the end of 2010-11 are forecast at 181 million tonnes, which is 18 million tonnes lower compared to 2009-10 estimates," the Finmin report said.

The Monthly Economic Review by the Finance Ministry cited reports to highlight that international wheat prices rose to 18-month highs in August, before falling.

"The expected fall in the exports from the Black Sea region could see a shift in the trade flows in favour of exporting nations, especially US," it said.

Source : news.in.msn.com