New Delhi, July 04: In a major relief to exporters, government has allowed them to lift grains from FCI stocks in July at old ex-granary rates, conditional to money having been deposited in the previous months. This will ensure that those traders who had already transacted export deals before the government announced hike in ex-granary prices effective from July 01, do not have to pay the higher rates, government officials told a news agency.

They said the facility is available only for the current month and if the traders are unable to lift stocks by July 31, they will have to pay the higher prices. Traders, however, said such is the backlog for executing previous orders and shortage of rakes, even the one-month grace period will prove insufficient.

Government sells wheat and rice to exporters at predetermined ex-granary rates fixed on a three monthly basis and announced at least 45 days in advance.

These rates had been hiked by a significant Rs 300-865 per tonne in may effective for the July-September quarter. However, a number of traders who had entered into contracts while factoring in the rates applicable in the previous quarter were unable to lift stocks from FCI godowns to execute the deals on schedule. Officials said this was because of shortage of rail-rakes and other hassles. To enable them to execute the deals for which money has already been deposited with FCI, henceforth the ex-granary rates for a particular quarter will be applicable for the first month of the next quarter.

India's grain exports are likely to experience a slowdown after the latest hike in ex-granary prices.

Bureau Report