‘Govt to decide on wheat exports next week’

‘Govt to decide on wheat exports next week’

New Delhi: Government will decide next week whether to allow wheat exports, state agriculture minister K.V. Thomas said on Tuesday, as the world’s second-biggest producer after China weighs prospects of a record harvest against stubbornly high food inflation.

Union agriculture minister Sharad Pawar has consistently said India should allow wheat exports, which would benefit producers as international prices are currently near two-year highs.

But Thomas has said he is against overseas sales, according to a Press Trust of India (PTI) report.

“We are against wheat exports. We feel that if we open exports, domestic prices will be affected," Thomas said, according to the PTI report published in the Business Standard newspaper.

A senior govermnent adviser has supported wheat exports provided they are taxed in order to ensure domestic demand is adequately covered.

With food inflation in Asia’s third-largest economy again heading towards 9% and the fractious coalition government keen for support from the country’s half a billion poor in local elections, exports may be politically unpalatable.

Thomas said a panel of ministers would take the decision next week.

“There is no rift between food and agriculture ministries on wheat exports.

We go hand-in-hand to protect farmers and consumers’ interests," Thomas said.

“We have to take a balanced view. The decision should not destabilise the current (domestic) market prices," he added.

India approved exports of 500,000 tonnes of sugar without commercial restrictions last month — a figure backed by Pawar although the finance ministry favoured 200,000 tonnes only.

India, the world’s second-biggest wheat producer after China, is expected to harvest a record 82.3 million tonnes in 2011, up from 80.8 million tonnes a year earlier. It consumes around 76 million tonnes of wheat annually and already has overflowing stocks.

The country’s bonanza harvest is in sharp contrast to other major wheat producers such as the United States, where adverse weather conditions are threatening output and contributing to global price hikes.

India will decide on further sugar exports above the 500,000 tonnes approved without restrictions once it has final output figures for the current season, Food Secretary B.C. Gupta said.

India, the world’s biggest sugar consumer and second-largest producer after Brazil, should deliver about 25 million tonnes in the year to September against estimated consumption of 22 million tonnes.

The country is expecting normal monsoons this year — crucial for output in the agriculture sector, which makes up about 14.6% of India’s economy.