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Saturday July 4, 02:50 PM
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India allows limited wheat export, no subsidy
NEW DELHI (Reuters) - India has allowed the export of 900,000 tonnes of wheat by state-run firms and 650,000 tonnes of wheat products by private trade as monsoon rains revived after a dry spell.
The government rejected demands of an export subsidy, making shipments viable only to neighbouring Bangladesh, traders said.
The Directorate General of Foreign Trade, an arm of the commerce ministry, said late on Friday that export of the grain has been allowed up to March next year through MMTC Ltd, STC Ltd and PEC Ltd.
One trader with an international firm said Indian wheat would cost more than $240 a tonne in Southeast Asia and the Middle East, or $20-$30 more than Black Sea and U.S. wheat.
"The price does not favour exports without subsidy. Export is possible only to neighbouring Bangladesh, not beyond," said a Mumbai-based trader working with an international company.
An official of the Roller Flour Millers Federation of India said the export of wheat products was viable but the government had to give details of how it would monitor exports.
Analysts said the move had been anticipated by the market as a panel of federal ministers decided early this year to allow exports of two million tonnes of wheat and wheat products.
India has accumulated a huge surplus of wheat after banning exports two years ago. Soaring stocks after a bumper harvest encouraged the government to say earlier this year that exports would eventually be allowed.
Last month, Farm Secretary T. Nanda Kumar said export curbs could be lifted after evaluating the progress of monsoon rains, which are forecast to be 93 percent of the long-period average this year.
