India, the world’s second-biggest wheat producer, has banned overseas sales of the grain until the end of this year as the government seeks to build stockpiles and curb price increases.
The government notification, dated 9 February, will have limited impact as the country exports only small volumes of wheat.
Along with this, India has also banned the export of milk powder until September 30 to boost domestic supplies and rein in prices, part of a strategy to stem inflation.
Surging exports of skimmed milk powder reduced availability of milk for domestic consumption, prompting the government to ban overseas shipments, Finance Minister Palaniappan Chidambaram told reporters in New Delhi on 14 February 2007. Milk procurement by Indian cooperative producers declined by 100,000 kilograms a day to 23 million kilograms from a year earlier, the minister said.
The move to ban wheat exports follows a jump in the wholesale price inflation to 6.58% in the week ended 27 January, the fastest since December 2004 after record growth in Asia’s fourth-largest economy.
India, which resumed wheat imports in February 2006 after six years, is taking steps to stockpile wheat, sugar, pulses and other commodities to slow inflation to below 4%.
The wheat harvest in the year ending 30 June may total 72.5million tonnes, up 4.5% from 69.35mt a year ago, the farm ministry said.
Minister for agriculture, food and civil supplies, consumer affairs and public distribution Sharad Pawar had said on 13 December that output may rise 7% to 74mt in the year ending June.
India’s wheat production in 2006-07 is forecast at 68mt, compared with a demand of 72.7mt, the US department of agriculture (USDA) had said in a report dated 9 February.
Last year’s demand was estimated at 70mt.
The government aims to spend Rs841 crore over the next three years to boost wheat output by improving irrigation and soil conditions. The crop area may rise by 1.4 million hectares, the farm ministry had said in September.
Indian farmers had planted 28.17 million hectares of wheat as of 2 February, up 7% from 26.43 million hectares a year earlier, the farm ministry said.
Wheat, India’s biggest winter crop, is usually harvested starting March.
Production will largely depend on the weather this month and next during the crucial grain filling stage as high temperatures could reduce yields.
The USDA had forecast India’s wheat exports in 2006-07 at three lakh tonnes and imports at 60 lakh tonnes.