NEW DELHI (Commodity Online) : India's wheat procurement hit a record 31 million tones so far and the country is likely to export a major chunk of it mainly due to lack of storing facilities.
This season's whet procurement mounted to 31 million tones, almost eight times its target of 4 million, forcing authorities to pile up nearly 7 million tones of grain under tarpaulin in Punjab and Haryana, its two main wheat producing states.
According to Wheat Products Promotion Society, keeping wheat open is prone to rot and decay. Even in good weather, it is not safe to stock wheat in the open beyond six months.
Analysts said the forthcoming monsoon rains are putting pressure on India to step up grain exports, strengthening prospects of a bigger global wheat glut this year.
They said India will probably ship additional cargoes of wheat to its neighbors and try to blaze inroads into Southeast Asia and the Middle East, giving competition to Black Sea-origin grain and squeezing global benchmark prices.
Traders said Indian wheat prices, propped up by generous rates paid to farmers by official agencies, are too high to be competitive in distant markets but in neighbouring countries can challenge Black Sea wheat, which has many users in South Asia.
They added that Indian supplies would put more pressure on benchmark Chicago wheat prices, which have lost around 14 percent this year on prospects of growing global supplies of the grain for a third straight year.
Indian wheat is quoted around $230 to $240 a tonne, including cost and freight, to Bangladesh, against $230 a tonne for Ukrainian wheat and $280 a tonne for Australian prime wheat.
Country's rice stocks too soared to 26 million tones, more than double the target of 12.2 million and set to soar as forecasts of normal monsoon rainfall from June will help the crop bounce back from a 14 percent fall after last year's drought.
As a beginning, India waved through exports of 100,000 tones of non-basmati rice to Bangladesh, a week after permitting shipment of 400,000 tones of wheat to the country
Still, India is reluctant to completely scrap its ban on export of wheat and non-basmati rice for fear that could stir up further criticism and public protest against rising food prices, which have surged more than 16 percent in the year to May.