With foodgrain stocks far outstripping storage capacity,the State Trading Corporation (STC),in a desperate attempt,today invited bids for export of wheat.
The government stock of foodgrains (wheat and rice together) is estimated to swell up to 75 million tonnes by the end of June as against the covered godown capacity of 46.5 million tonnes in the country. Even accounting for open storage space to the tune of over 17 million tonnes,capacity will be short by about 10 million tonnes in the middle of monsoon,a situation the government can ill afford.
Officials,however,confide that the STC move is an exploratory exercise to identify the viability of wheat exports given the fact that economic cost of Food Corporation of Indias wheat stock is estimated to be running higher than the global wheat prices. The government may be required to provide export subsidy to dispose of its excess stock,which may not go down well considering the governments fiscal situation.
This season has seen a bumper wheat harvest (over 88 million tonnes),and the government is targeting to procure about 32 million tonnes by the end of June. With exports,it can hope to create space for new wheat procurement.
A proposal by the Food Ministry to offload over 26 million tonnes of foodgrains in the public distribution system at highly subsidised rates did not find favour with the government given the size of the resultant food subsidy burden,that will go past the previous fiscal food subsidy burden.
Incidentally,the C Rangarajan panel that looked into ways to handle the foodgrain stocks,is learnt to have advised export of rice,which would not have required any subsidy.
STC has asked bidders for wheat to submit their bids by May 24.