Allow export of wheat, rice and sugar, says Pawar

Making a strong case for bringing down the $600 per tonne export benchmark price for Indian onions which has made them uncompetitive, Agriculture Minister Sharad Pawar on Wednesday said the Minimum Export Price is double the prevailing rate in international markets.

Pawar also said that the government should give a serious thought to allowing exports of wheat, rice and sugar looking at bumper production and comfortable stock position.

The minister noted that wheat production is likely to exceed the current estimate by 2.5 million tonnes to touch 84 million tonnes due to favourable weather conditions.

"I have enquired from the states from where onions are exported to different countries and got information that the prevailing international export price is around $250-300, but our MEP, at $600 per tonne, is almost double," Pawar said.

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"This (higher MEP) will create obstacles in exporting onions from India," Pawar said on the sidelines of an agriculture function.

"I think it is a fit case for giving a second thought to bring down MEP to make Indian onions internationally competitive," he said.

Pawar expressed confidence that the Empowered Group of Ministers (EGoM) meeting this week will give serious thought to the issue (of lowering MEP).

The government had last week decided to lift ban on exports of onions following farmers' protest over crash in domestic prices within two months of touching Rs 80 a kg.

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The decision to this effect on February 17 last was taken at the meeting of the empowered group of ministers (EGoM) on food, headed by Finance Minister Pranab Mukherjee.

But, as a precautionary measure against possibility of prices shooting again, the EGoM decided to allow shipments of onions at a Minimum Export Price (MEP) of $600 (About Rs 28,000) per tonne.

Agricultural Minister Sharad Pawar, Food Minister K V Thomas and Commerce Minister Anand Sharma could not attend the crucial meeting due to other engagements.

Earlier, Pawar and Maharashtra Chief Minister Prithviraj Chavan had approached Commerce and Industry minister Anand Sharma to open onions export in view of farmers agitation in the main producing state Maharashtra due to crashing of prices as a result of oversupply.

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The government had banned onion exports in the last week of December, 2010, to augment domestic supply and contain onion prices, which had touched Rs 70-80 per kg.

Prior to the ban, India exported 11.58 lakh (1.158 million) tonnes of onions mainly to gulf countries, Sri Lanka and Malaysia during April-November of this fiscal.

Referring to debate on price rise in Parliament on Tuesday, Pawar said price rise of some vegetables like onions in the past one month was "temporary".

He made it clear that regulating perishable produce that comes directly from farmers, in line with other commodities like wheat and rice, was not possible.

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He reiterated that the Centre does not have much role in perishable items like fruits & vegetables which are primarily the responsibility of state governments.

"I cannot support anything. I said that our stock position is good whether it is rice, whether it is wheat or whether it is sugar. I think this is the time when government has to give a serious thought and allow certain exports," Pawar said when asked if he supports wheat, rice and sugar exports.

Food Corporation of India has 47 million tonnes of wheat and rice in its godowns against the buffer norm of 25 million tonnes as on January 1.

Pawar favoured wheat exports to cash in on high prices and short supply in global markets. There have been reports that China wheat crop might decline due to drought conditions.

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"We have ample buffer stock of wheat and this year's crop condition is extremely good...I am sure the next meeting of Empowered Group of Ministers (EGOM) this week will give a serious thought to it," he told reporters.

The exports of wheat and non-basmati rice were banned in February 2007 and April 2008, respectively, to control high inflation. Recently, exports of 150,000 tonnes of three superior varieties of non-basmati rice was allowed.

On wheat crop conditions, Pawar said: "As on today the weather situation is quite favourable. Last year our production was somewhat near to 81 million tonne. Looks like that we may reach to 84 million tonne (this year) provided, the good weather situation continues".

The ministry had recently pegged wheat production of the country, the world's second largest producer, at record 81.47 million tonnes in 2010-11 crop year (July-June) against 80.71 million tonnes in the previous year.

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Rice output is estimated to rise to 94 million tonnes this year from 89 million tonnes.

On allowing sugar exports, he said the EGoM  is likely to consider the issue this week.

"This year it (sugar export) was taken seriously by the govt to allow export of half a million tonnes. And quota allocation was also made, but decision was kept on hold.

"If we have to give a second thought, we have to call a meeting of Empowered Group of Ministers (GoM). And I think that the Food Ministers have suggested calling a meeting of the GoM sometime in this week and one of the agendas would be reasons to allow sugar export. So that decision would be taken in the GoM meeting probably this week," he said.

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Sugar output is pegged at 24.5 million tonnes in 2010-11 (October-September) against 19 million tonnes in the previous year. The annual demand is seen at 22 million tonnes and India has an opening stock of 5 million tonnes.

Govt may allow wheat exports

The government is considering allowing wheat exports on the back of estimates of record production this year, Food Minister K V Thomas said on Wednesday.

The government will also look into allowing sugar exports besides reducing minimum export price of onions, he said.

"Wheat production is expected to be a record and we have sufficient stock in our godowns. We are looking at ways to use surplus stocks including exports," Thomas told PTI.

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Wheat exports have been banned since 2007. As on January 1, the government godowns have 21.2 million tonnes of wheat, against the buffer norm of 11.2 million tonnes.

According to the government's second advance estimates, wheat production is likely to touch a new record of 81.47 million tonnes in the 2010-11 crop year and there are possibilities of it reaching even 84 million tonnes.

Thomas said he has asked the state governments to increase lifting of wheat under the open market sale scheme in order to help clear stock with the Food Corporation of India and create a space for new crop.