Wheat exports to more than double in 2012-13 on record harvest

Wheat exports to more than double in 2012-13 on record harvest

Wheat exports from India, the world's second-biggest producer, is expected to more than double to 1.5 million tonnes in 2012-13 marketing year on account of back-to-back record harvest, the US Department of Agriculture (USDA) said in a report.

"Assuming the current export price parity for Indian wheat vis-a-vis other origins, 2012-13 marketing year wheat exports are forecast at 1.5 million tonnes," the report said.

In 2011-12 marketing year (April-March), wheat shipments are estimated to touch only 7,00,000 tonnes because prices remained very uncompetitive in the global market since exports were allowed in September 2011, it said.

Wheat export prospects can improve if there is a sharp increase in global prices, it said, adding that the actual export volumes will depend on the competitiveness of Indian wheat during the marketing year.

Due to the considerable delay in the decision to allow wheat export, India could not take advantage of high global wheat prices in the early part of this year, the USDA said quoting market sources.

In 2012-13, the USDA mentioned that wheat exports will mostly be "limited to private exports" to neighbouring Bangladesh, the Middle East, Africa and South Asia.

Pointing out that the Indian government will be under tremendous pressure of inadequate storage facilities for the new wheat crop, the USDA said: "The government is unlikely to subsidise exports of government wheat due to local political and World Trade Organisation commitment concerns.

"India has sufficient domestic supplies to export 5-6 million tonnes of wheat, specially if the government allows export of government wheat in case international prices exceed total cost," it observed.

The cost of government wheat is prohibitively high at USD 346 a tonne compared to current global prices, it added.

Due to record procurement this year, stocks in government godowns as on April 1, 2012 are forecast higher at 18.5 million tonnes, compared with 15.36 million tonnes in the same period of 2011. Thus, the ending stocks in 2011-12 are nearly three times the government's desired stocks of 7 million tonnes, the report said.

According to the USDA, the government's wheat procurement is expected to be over 32 million tonnes in 2011-12 marketing year due to record production and higher support price.

Wheat production is estimated to be bumper at 87.5 million tonnes this year, higher than consumption of 85 million tonnes, it added.