The Hindu Business Line : Wheat exports likely to dip by 10 lakh t

WHEAT exports from the country are expected to fall by nearly 10 lakh tonnes this fiscal on the Government's decision to suspend allocation from the Food Corporation of India (FCI) stocks and return of countries such as Canada, Argentina and the US in the global market.

"Someone like Bogasari Mills of Indonesia has stated that it will not buy wheat from India. It has opted to buy Australian wheat," Mr Atul Chaturvedi, Vice-President, Adani Exporters, told a grains conference last week.

During the current fiscal, wheat exports are projected to decline to 27.55 lakh tonnes against 37.25 lt last fiscal.

Wheat exports from the country witnessed a rise last year mainly since drought affected production in Australia. "India is seen as a low quality and unreliable exporter. With that sort of image, it is only natural for importing nations to look for reliable sources," traders say.

Moreover, Indian wheat is mainly used as feed for animals or for blending in flour with superior variety to make products such as noodles.

"India is only a filler in global wheat trade. Our share in the world grains trade is a miniscule 4.5 million tonnes (mt) out of the 100-mt wheat export market," said Mr D.P. Singh, President, Grain Exporters Association.

"There is potential to export even that small space that we enjoy in the world market. However, unclear Government policy is an area of concern," he said.

The concern should now end with the Government last week making provisions for private traders to procure directly from the growers as part of long-term grain export policy.

Besides, periodic revision of FCI allocation price is also hampering exports. From January 1, the price of wheat produced in 2003 has been raised by Rs 500 a tonne to Rs 6,525.

Mr Chaturvedi said export opportunities depended on following up and backing up orders. "We are now presented with a wonderful opportunity to export to Pakistan," he said.

Though exports to Indonesia, Vietnam and Bangladesh are estimated to rise totally by 5.7 lakh tonnes, shipments to the Philippines are seen falling drastically by 11 lakh tonnes. Last fiscal, Manila had bought 13.4 lakh tonnes; but this fiscal, it is seen down to just two lakh tonnes.

Similarly, exports to Vietnam, South Korea and Taiwan are also projected to fall, according to traders.

Still, the trade sees possibility to improve at least from the next fiscal. "There is still scope to export to West, South and South-East Asian countries," traders said.

Wheat exports gained momentum in the second half of 2000 when the Government began allocating from FCI stocks as they began to bulge. However, the Government suspended this exercise from November last as stocks declined.

Foodgrain stocks have declined to around 25.44 mt as on December 2003 as against nearly 60 mt the previous year.

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