India Continues Wheat Export Ban.

The Indian government has decided against wheat exports for now despite mounting pressure to allow farmers to benefit from higher prices overseas, reported The Economic Times.

The decision by the empowered group of ministers (EGoM) on food, which met on Monday, could firm up global wheat prices further, but force wheat farmers to bring their produce to mandis.

The EGoM also decided to distribute 50 lakh tonnes of wheat and rice to states, proportionate to their recent offtake, for below poverty line families countrywide but put off a decision on the crucial food security law.

Wheat purchases by the states agencies were down almost 50 per cent at the beginning of the rabi marketing season from the levels last year despite a bumper 82.4 million tonnes crop, making the inflation-scarred government jittery.

The government needs to have enough foodgrain in stocks to ensure adequate availability for the food security law that is expected to be rolled out later this years.

Officials suspect that wheat farmers are holding back their produce from mandis in anticipation of exports opening up and traders offering better prices. That the difference in procurement is down to 11 lakh tonnes after the first indications from the government that it is unlikely to open up wheat exports has reinforced this view.

State agencies have purchased 185 lakh tonnes of wheat by May 2 this year against 196 lakh tonne of wheat bought by this time last year.

Source : worldbakers.com