New Delhi: India should allow limited exports of wheat, rice and sugar to benefit from high global prices, agriculture minister Sharad Pawar said, as long as domestic consumption is catered for.
“This is the right time to give serious thought over allowing exports of certain quantities of rice, wheat and sugar as we have ample stocks. World prices are very good while harvest looks favourable,” Pawar told reporters on Wednesday.
“Exports should be allowed only to the extent where it doesn’t hurt domestic consumers,” Pawar said.
India usually produces more of these basic staples than its domestic requirements and currently has stockpiles of rice and wheat. But a severe drought in 2009 pushed it painfully onto the global market for sugar and sent international prices spiralling.
The coalition government wants to introduce a food security bill aimed at supplying subsidised staple foodstuffs to India’s poorest, as spiralling food inflation hits hardest the 42% of its population who live on under $1.25 per day.
The government could increase the amount it spends on food subsidies in the next budget, which will be announced on 28 Feb.
Pawar lost the food portfolio in a government reshuffle last month. His opinion still carries weight but decisions on exports are usually made by the cabinet.
Government sources said on Tuesday a decision on whether to allow 500,000 tonnes of unrestricted sugar exports under the Open General Licence (OGL) scheme could take another three weeks as discussions were broadened to key ministries.
Pawar said the country’s wheat production is likely to hit a record 84 million tonnes in 2011.
India’s 1 Feb. wheat stocks were at 19.4 million tonnes, substantially higher than a target of 8.2 million tonnes, government sources said.
Rice inventory rose to 27.8 million tonnes against a target of 11.8 million tonnes, they said.
The country’s sugar production in 2010/11 is likely to rise to 24.5 million tonnes, sharply higher than the previous year’s harvest of 18.8 million tonnes.
India last week lifted a ban on onion exports that had riled farmers, but set minimum exports price (MEP) at $600 per tonne.
Pawar said the MEP should be cut to attract overseas buyers and help falling local prices.
“There is a fit case for lowering the MEP of onion. Export markets suggest the current MEP is almost double the international trend,” he said.
Onion prices in India, the world’s second biggest producer of the vegetable, have fallen over 70% from their December peak.