(Updates prices in seventh paragraph.)
March 7 (Bloomberg) -- India, the world’s second-biggest wheat grower, formed a ministers’ panel to consider additional exports from state stockpiles to make room for a near-record harvest starting next month.
The panel will include Food Minister K.V. Thomas, Finance Minister Palaniappan Chidambaram and Agriculture Minister Sharad Pawar, Thomas told reporters in New Delhi today after a cabinet meeting that considered a proposal to permit exports of 5 million metric tons from state reserves. The ministers will meet later today, Pawar told reporters.
Shipments from India are adding to global supplies even as Australia predicts a 13 percent increase in its harvest, snow water replenishes U.S. soil moisture, the biggest shipper, and Argentina eases curbs on exports. Sales from India may reach 10 million tons in the year from April 1, according to New Delhi- based National Centre for Agricultural Economics and Policy Research. That along with forecasts for record rice inventories among the biggest exporters may contain world food costs that have tumbled 12 percent from an all-time high in 2011.
“India has got four to five months for exports until the northern hemisphere crop comes into the market in August and September,” said Vijay Iyengar, managing director of Agrocorp International Pte., a Singapore-based trader. “Countries in Asia, Africa and the Middle East will buy Indian wheat.”
Record harvests expanded state wheat stockpiles in India by 32 percent to 31 million tons at the start of February, forcing the government to allow shipments of 4.5 million tons by state companies since July. The food ministry first proposed additional exports in January.
Middle East, Africa
Exports from India may total 5 million tons in the year ending March 31, with sales mostly to Southeast Asia, the Middle East and Africa at prices ranging from $305 a ton to $315 a ton, displacing supplies from Ukraine and Australia, Veena Sharma, secretary of the Roller Flour Millers Federation of India, said yesterday. The country is boosting shipments as prices trade near eight-month lows after crops improved globally.
Futures have fallen 27 percent in Chicago since reaching a four-year high of $9.4725 in July. The contract for May delivery rose 0.6 percent to $6.88 a bushel on the Chicago Board of Trade at 1:52 p.m. in Mumbai. Prices fell to $6.80 yesterday, the lowest since June 22.
“The global wheat price looks bearish, so India should export as early as possible,” said Vandana Bharti, assistant vice president at New Delhi-based SMC Comtrade Ltd. “Though it is bearish globally as it will add to the surplus, the Indian market looks bullish.”
Farmers in India will harvest 92.3 million tons starting April 1, near the record 94.9 million tons a year earlier, according to the farm ministry. The government plans to boost purchases from farmers to 44 million tons this year from 38.1 million a year earlier, the food ministry said Feb. 19.
--Editors: Thomas Kutty Abraham, Jake Lloyd-Smith