India, Pakistan may enter wheat market: CWB
April 30, 2011 00:00:00
NEW DELHI, Apr 29 (Commodity Online): A day after India and Pakistan restarted trade talks, both could be poised to test their wheat export records, signalling that nearly eight million tonnes in extra supplies could hit the market, according to Canadian Wheat Board (CWB).
The CWB said it is likely that India, which will next week decide on whether to relax a four-year ban on mainstream wheat exports, will permit shipments of 1-2 million tonnes.
However, with the harvest in the world's second-biggest wheat producing country expected to come in at a record 82.3 million tonnes, where is significant scope for additional trade.
Although domestic consumption, of 78m tonnes in 2009-10, is rising fast, the country has built up hefty stocks of the grain through government support programmes - raising concerns of where to store the grain.
India and Pakistan are on pace to challenge their all-time production records the board said. India will have a significant wheat surplus and could export upwards of five million tonnes.
While India's food minister, KV Thomas, has already pitched himself against wheat exports, the CWB highlighted the gains from exploiting international prices still near two-year highs.
Any upward tick in world prices increases the motivation to permit exports, the board said.
Pakistan, which is set for a third successive bumper crop in 2011-12, reopened to exports in January, since when it has achieved some success from competitive pricing compared to South East Asian countries against Australia, a big supplier to the region. Two weeks ago, Pakistani wheat was quoted for export at $310-315 a tonne, including freight, compared with $325 a tonne for Australian feed wheat, and $420-425 a tonne for prime milling wheat.
For the country to test its export record would mean shipments of more than two million tonnes, as recorded in 2007-08 and 2008-09. India reached its all-time high in 2003-04, with a 5.65 million tonne figure.
For both countries combined to export at record rates implies at least 7.85 million tonnes hitting the market, roughly equivalent to shipments from Argentina, the southern hemisphere's second-ranked wheat trader.
