Govt okays export of 5 million tonne FCI wheat via private traders

The total wheat export permitted from FCI godowns now stands at 9.5 million tonne for this fiscal.

New Delhi: Sitting on a huge pile of wheat stock, the Centre on Thursday allowed export of extra 5 million tonne of the grain from its godowns and roped in private traders for speedy shipments to create storage space.

The total wheat export permitted from FCI godowns now stands at 9.5 million tonne for this fiscal.

"The GoM has approved export of additional 5 million tonne wheat from the FCI stocks. Only private traders will be allowed to export this quantity," Food Minister K V Thomas told reporters after the meeting.

Earlier in the day, the Cabinet Committee on Economic Affairs (CCEA) referred the matter to an informal group of ministers (GoM) headed by Agriculture Minister Sharad Pawar.

"The CCEA approval is not required. We will convey the decision to the CCEA," Thomas said.

He clarified that public sector trading firms will not participate in export of the wheat quantity allowed today. On earlier two occasions, only PSU firms -- MMTC, PEC and STC were allowed to export 4.5 million tonne of FCI wheat.

Thomas said recognised private traders will be allowed to export the 2011-12 crop via bidding process at a floor price of Rs 1,480 per quintal.

Private traders will initially be allowed to export wheat that is lying in the Punjab godowns and they have to bear the transport cost till port for the export purpose, he added.

The additional export from FCI godowns would help create space for new wheat crop to be procured from this month-end and permitting private traders to export on behalf of the Centre would speed up the shipments.

Asked if PSUs will be allowed to export more quantity, Thomas said: "PSUs are already allowed to export 4.5 million tonne of wheat from FCI godowns. They will continue to export. A separate CCEA note will be moved once the current allocated quantity is exhausted," Thomas said.

Finance Minister P Chidambaram, Food Minister K V Thomas, Railways Minister P K Bansal and Commerce Minister Anand Sharma were also present in the meeting.

On export of FCI wheat through PSUs, Sharma said: "If the need arises, additional stocks from FCI godowns will be allowed for export through PSUs."

So far, about 2 million tonne wheat has already been shipped by PSUs in a price range of USD 295-330 a tonne.

The government had over 30 million tonne (MT) wheat stock in godowns of the Food Corporation of India (FCI) at the beginning of last month, as against the actual requirement of 7 MT at the end of this month.

The wheat stock has piled up in the government godowns due to record procurement following bumper crop in the last two years.

In 2013-14 marketing year starting next month, government is aiming at procuring a record 44 MT, as against 38 million tonne in this year.

Wheat production touched all-time high of 94.88 MT in 2011-12. Production is estimated to be 92.30 MT this year.