New Delhi, Jan 26 (PTI) India may ease the nearly two-year-old ban on wheat shipments and even use its large central reserves for exporting the foodgrain after the rabi harvest in May, said a report by the US farm department.
"With a possible large build-up in government wheat stocks in the 2009-10 marketing season (April-March), the government may be prompted to remove export restrictions and even make wheat available from the government stocks for exports after the harvest in May," the report by the US Department of Agriculture (USDA) said.
Moreover, India may need to extend an export subsidy if and when it decides to use the wheat reserves for exports, it said, adding that the high domestic minimum support price of the foodgrain will dent its competitive nature.
"Because of the high local support price for wheat, Indian wheat is unlikely to be competitive in the world market without an export subsidy," it reasoned.
On its part, though the government expects wheat production in 2008-09 to top last year's record of 78.40 million tonnes, it has so far remained non-committal on lifting the ban on the exports, which was imposed in February 2007 to boost domestic supply and contain the price rise.
However, the USDA said the government stocks have swelled sharply following a record procurement by the government agencies at 22.7 million tonnes in the marketing season 2008-09, starting April, due to a steep increase in the minimum support price of wheat and curbs on purchases by traders.
"With another likely record or near record government wheat procurement in the 2009-10 marketing season ... Stocks could climb to around 30 million tonnes by June 1," the report said. PTI
Press Trust Of India