The Hindu Business Line : Foodgrain stocks at 5-year low; exports likely to be hit

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Foodgrain stocks at 5-year low; exports likely to be hit

Our Bureau

New Delhi , Jan. 6

FOODGRAIN stocks in the central pool have dipped to 254.48 lakh tonnes (lt) as on December 1, a five-year-low for this date. It virtually signals the end of the party for export of grains from the country, more so in an election year when the Government has every reason to be wary of any possible spiralling of domestic prices.

The total stocks of 254.48 lt (145.62 lt wheat and 108.66 lt rice) on December 1, 2003, is less than half of last year's corresponding level of 515.42 lt (312.72 lt wheat and 202.68 lt rice) and the lowest since the December 1, 1998, level of 249.59 lt.

Rice stocks are, in fact, ruling at a 11-year-low, clearly indicating that the scope for large-scale exports of grain from the Food Corporation of India's (FCI) godowns no longer exists.

During the period from November 2000 to November 2003, the FCI offloaded 265.82 lt of grains from its stocks to exporters, comprising 148.49 lt of wheat and 117.33 lt of rice. Besides this, another 215 lt was offloaded through various employment generation schemes, such as Food for Work and Sampoorna Grameen Rozgar Yojana (SGRY) as part of drought-relief operations. It is these measures that have mainly led to the decline in stocks from their peak levels, touching 648.30 lt on June 1, 2002.

But the situation has changed considerably now. With wheat dara quoting at Rs 790-795 per quintal now in the Delhi market, compared with Rs 655-Rs 660 per quintal a year ago, the Government, officials said, cannot afford to be overly enthusiastic about exports. With the new wheat crop set to arrive in the markets only from mid-April, the Government's top priority would now be to ensure adequate domestic availability.

The Government has already signalled its intentions to discourage exports by announcing a steep Rs 500 per tonne increase in FCI's issue price of wheat and Rs 300 per tonne in the case of rice sold to exporters for the January-March 2004 quarter. Since November 2000, the export price for wheat has been gradually hiked from Rs 4,150 per tonne to Rs 6,525 per tonne (2003-04 crop), while the same for raw rice has gone up from Rs 5,650 per tonne in May 2001 to Rs 7,600 per tonne (2002-03 crop).

While the export prices were initially equal to the issue prices for the below poverty line segment — Rs 4,150 per tonne for wheat and Rs 5,650 per tonne for rice — the current prices are in line with the corresponding above poverty line issue prices of Rs 6,100 per tonne and Rs 8,300 per tonne, respectively.

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