India, buoyed by prospects of a bumper wheat crop, should spell out its policy on grains exports soon to make a dent in the global market and recapture customers, industry officials said on Tuesday. They said the lack of a consistent government policy had cost exporters dearly and robbed the country of regular buyers of its wheat in Southeast Asia, the Middle East and Europe.
"We will have to reinvent the wheel again," said DP Singh, chairman of the All India Grain Exporters' Association.
"Flour-millers had started accepting Indian wheat quality, but with exports on hold, they have turned to other origins." Indian grain exports have been on hold since last August, when the government stopped issuing grains to exporters as stocks fell due to robust overseas sales and a drought in 2002.
Farm ministry officials and scientists said the country was set for excellent summer wheat and rapeseed crops, with an increase in area under cultivation and late rains.
Rains during this year's monsoon season, which runs from June to September, were 13 percent below-normal, but post-monsoon rains in many parts of the country provided good soil conditions and ideal weather for sowing of the summer crop.
Officials said though an exact forecast could be made only in January, the expectation was the yield this year would be close to the output in the 1999/2000 season, when India harvested a record 76.4 million tonnes of wheat.
Singh said the government should release a specific quota of grains for export every year, after making allocations under the public distribution system for domestic needs, to meet the demands of traditional overseas buyers.
He said last summer traders had bought large quantities of wheat from the open market, hoping the government would announce steps to make exports viable by offering to reimburse certain taxes and other expenses.
Traders say exports are not viable unless the government gives a subsidy on wheat procured from the open market or sells to exporters from its stocks at lower rates.
Indian wheat is now quoted at about $190 a tonne (free on board), compared with global prices of about $165. "There was lot of bloodshed, whoever bought in the hope of government giving some subsidy lost money," he said.
Food Minister Shared Pawed said this month the country did not plan to subsidise grain exports in the year ending June 2005.
But Singh said exporters believed that the government would come out with some form of World Trade Organisation-compatible subsidies before the wheat crop was harvested in April.
"If the crop is good, the government will have to liquidate stocks. There is no point in keeping on storing and then dumping it later," said Atul Chaturvedi, president of Aden Exports Ltd.
Chaturvedi said exports made good economic sense, but governments do not look at it solely from that perspective. "Whether the government will allow exports from its stocks is a million dollar question."