India can easily export 3-4 mn tons of wheat: CACP

With government sitting on excess foodgrains stocks worth Rs 43,000 crore, the Commission for Agricultural Costs and Prices (CACP) feels the country can easily export 3-4 million tonnes of wheat to take benefit of higher global prices.

The government had banned wheat exports in early 2007 and rice shipments in April 2008.

"The government godowns have foodgrains stock worth Rs 40,000-43,000 crore over and above the buffer norm. You can unload some quantity of foodgrains either in the domestic market or in the global market.

"Luckily today the export market is good and you can easily export 3-4 million tonnes of wheat," CACP Chairman Ashok Gulati told PTI here.

CACP, which suggests minimum support price (MSP) of 40 agri-commodities, has recommended to the government allowing export of the grain in its recent report submitted to the Agriculture Ministry.

Food Corporation of India ( FCI), the nodal agency for procurement and distribution of foodgrains, has a huge stock pile of foodgrains of over 47 million tonnes as against the required buffer norm of over 25 million tonnes.

India is estimated to have produced a record 84.27 million tonnes of wheat in 2010-11 crop year ending June. Rice output, too, is expected to rise to 94 million tonnes from 89 million tonnes in the previous crop year.

Stating the global market is favourable for exports, Gulati said that current domestic wheat prices stand at USD 225/tonnes as against CIF price (cost, insurance and freight prices) of USD 360-380/tonnes in many countries.

"Opening up of wheat exports can help farmers earn profits. If you allow exports, there will be some lifting of domestic price for farmers and will enable them recover the increasing cost," Gulati said.

There is huge demand from global wheat buyers Egypt and other countries like Sri Lanka and Bangladesh, he added.

Gulati, who is also an agri-economist, said apart from wheat, India has scope for export of rice.

"You can have more margin in rice today than in wheat. Indian prices of rice are almost half to two-third of the international prices," he observed.

The CACP warned that if export of rice and wheat are not allowed now, the government will end up having huge stock of 60 million tonnes plus as on July 1, this year, when wheat procurement would be over.

"If stock are not unloaded, then it will be a repeat of 2002, when we had mountains of foodgrains stock but global prices were very low. So, we had to liquidate stock through subsidising exports," he said.

But today, the government can liquidate a part of the stock for export without subsidy, he noted.