India's northern state of Punjab, the second biggest grower of wheat, has bought more than 10 million tonnes of the grain from local farmers so far this year, a government statement said on Thursday. Analysts say high stocks at state-run warehouses will encourage the government to lift a ban on wheat exports, clamped in early 2007, after elections are completed in mid-May.
The Indian government, helped by major wheat producing states such as Punjab, Haryana and Uttar Pradesh, buys wheat from domestic farmers at fixed price to run welfare schemes and protect growers from distress sale. Farmers have sold more to the government due to a higher purchase price of 1,080 rupees per 100 kg for the 2009 harvest, the statement said. Last year, the government had bought wheat at 1,000 rupees per 100 kg.
The Punjab government has bought more than 10 million tonnes of wheat for the second year in a row, the statement said. After producing a record 78.6 million tonnes wheat in 2008, India's output this year is estimated 77.8 million tonnes, the government had said in February. Traders say expectations of a bumper crop this year and overflowing government grain bins would help lifting a ban on futures trade in wheat.
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