Govt may lift grain export curbs after stock review
The government is considering lifting curbs on rice and wheat exports but will take a decision based on how much grains it requires for domestic demand including that for welfare schemes, a senior government official said on Monday.

Overflowing grain bins in India, the world's second-biggest wheat and rice producer, gives the government plenty of leeway to lift grain export curbs, clamped down in the past two years when global prices soared and supplies squeezed.

Bumper harvests and higher purchases by the government have pushed rice stocks to 20.4 million tonnes on June 1, up 69 percent from a year earlier and wheat stocks to 33.1 million tonnes, a rise of 37 percent from a year ago.

"I am actively looking at that right now," Trade Secretary Rahul Khullar told reporters when asked if the government was considering revoking the ban.

However, Khullar said a decision would depend on how much grain would be required to run various welfare schemes and to meet an election promise to guarantee a fixed supply of cheaper grains to the poor.

"You have to look at this thing far more carefully. It is not a simple issue. Once I take stock of how I can meet that demand, then and then only can I see whether I have actually a marketable surplus which can be exported," he said.

Some analysts believe export curbs may continue for a while as the government of Prime Minister Manmohan Singh is expected to raise supplies of grains to the poor.

The Congress-led coalition, which was re-elected with the help of rural support, had promised during its campaign that it would raise the supply of cheap grains for the poor.

Last month, Farm Minister Sharad Pawar said India was in no hurry to lift curbs on wheat and rice exports.

SUBDUED EXPORTS

India's overall exports have declined for seven straight months since October, and Khullar said it was too early to say if the situation would improve in the next 1-2 months.

In April, India's exports declined by a third and policy makers have said it would revive only after September.

The trade ministry has submitted to the finance ministry proposals for providing more incentives for exporters that could be considered in the budget to be presented on July 6, Khullar said without elaborating. "You will see it in the budget."

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