India's government said Saturday it will sell 6.5 million tonnes of wheat to bulk consumers such as flour millers to keep a check on rising prices and overflowing stocks. India, one of the world's largest wheat producers as well as one of its biggest users, banned wheat exports in early 2007 to boost domestic supplies after production was hit by bad weather and to help keep prices down.
The ban was lifted last year but the country's grain warehouses are still bulging and there have been reports of wheat stocks left rotting in the open due to a lack of warehouse space. A top finance ministry panel has also approved the sale of 500,000 tonnes of wheat and rice to retail customers.
The disposal of the grains will increase the availability of these commodities in the market and have a "moderating influence" on prices, an official statement added. India harvested a bumper wheat crop of 93.90 million tonnes in the 2011-12 crop year which runs from July to June. The central government's stocks of wheat stood at 40.58 million tonnes at the end of October. The latest move comes after India earlier this month approved the export of two million tonnes of wheat. The government is keen to reduce its wheat stocks and make room in storehouses for summer crops.
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