Indian government to ban exports
Indian government considering banning export of wheat products to tame spiralling food prices.
NEW DEHLI:
The Indian government is considering banning the export of wheat products in a series of measures to tame spiralling food prices which have led to inflation and increased pressure on an embattled ruling Congress party.
India currently allows up to 650,000 tons of wheat product exports until March 31, though Prime Minister Manmohan Singh is expected to ban the export of wheat products and remove essential commodities from the futures market after a cabinet meeting on Thursday, the Press Trust of India reported.
Traders argue that banning exports of wheat products would not help tame food inflation, as the country has huge wheat stocks. On January 1, 2011, India’s wheat stocks stood at 21.5 million tons against a target of 8.2 million tons. “Not much is happening on the wheat product export front as inconsistency in its export policy hold us from entering into long-term export contracts,” Veena Sharma, secretary of the Roller Flour Millers Federation of India, told Reuters.
Data shows that food inflation in the year to January 1 stood at 16.91 per cent, easing marginally from 18.3 per cent recorded in late December, which was the highest in over a year.
Analysts say that soaring prices of vegetables and dairy products are largely responsible for the current level of inflation, which could threaten the Congress party’s chances in elections in states like West Bengal and Tamil Nadu that are essential for Singh’s coalition to keep a majority in parliament.
India also banned onion exports last month after prices increased by 83 per cent since June, forcing the government to request imports from Pakistan, The Economic Times reported.
Published in The Express Tribune, January 14th, 2011.
The Indian government is considering banning the export of wheat products in a series of measures to tame spiralling food prices which have led to inflation and increased pressure on an embattled ruling Congress party.
India currently allows up to 650,000 tons of wheat product exports until March 31, though Prime Minister Manmohan Singh is expected to ban the export of wheat products and remove essential commodities from the futures market after a cabinet meeting on Thursday, the Press Trust of India reported.
Traders argue that banning exports of wheat products would not help tame food inflation, as the country has huge wheat stocks. On January 1, 2011, India’s wheat stocks stood at 21.5 million tons against a target of 8.2 million tons. “Not much is happening on the wheat product export front as inconsistency in its export policy hold us from entering into long-term export contracts,” Veena Sharma, secretary of the Roller Flour Millers Federation of India, told Reuters.
Data shows that food inflation in the year to January 1 stood at 16.91 per cent, easing marginally from 18.3 per cent recorded in late December, which was the highest in over a year.
Analysts say that soaring prices of vegetables and dairy products are largely responsible for the current level of inflation, which could threaten the Congress party’s chances in elections in states like West Bengal and Tamil Nadu that are essential for Singh’s coalition to keep a majority in parliament.
India also banned onion exports last month after prices increased by 83 per cent since June, forcing the government to request imports from Pakistan, The Economic Times reported.
Published in The Express Tribune, January 14th, 2011.