Food ministry say 'okay' to possible grain exports

Food minister KV Thomas gave a nod to possible exports of grains because of bumper crops and overflowing storage on Wednesday, after government sources told Reuters there could be one million tonnes of both wheat and rice offered.

India is one of the world's biggest producers of rice and wheat but also one of the largest consumers and has kept a tight rein on exports since 2007 to ensure it can provide cheap food grains to the poor.

Farm Minister Sharad Pawar has called for grain exports but so far the food ministry has not echoed that call publicly, wary of high inflation and possible demand in a proposed Food Security Bill to provide cheap grains to the poor.

"The food ministry is not negative to exports, but we will have to look at demand in view of the Food Security Bill. We will place the issue before (the Empowered Group of Ministers)," Thomas told reporters on Wednesday.

The empowered group of ministers can implement any decision it takes on exports.

Concerns over food inflation, which is currently around 9 percent, and the need for supplies to fill commitments for more subsidised food in the proposed Food Security Bill have stayed the government's hand on exports so far.

But with storage overflowing after three years of bumper harvests and the onset of the monsoon, concerns are growing stocks outside could be damaged, adding to pressure for sales.

"The benefit of exports should reach farmers. We will take the decision at the earliest. My food production is very high and I have to think about storage as well," Thomas said.

Farmers have also been calling for exports to take advantage of attractive international prices, but these are now slipping.

Wheat, supported earlier on worries over output from major producers like the United States, is now falling as the U.S. harvest advances and concerns grow a global recovery is tepid.

Rice prices have been supported in recent weeks by demand from Africa and Indonesia.

Thomas said the Empowered Group of Ministers would meet "at the earliest," to decide on possible exports.