Karachi : India and Pakistan could be poised to test their wheat export records, signalling that nearly 8 million tonnes in extra supplies could hit the market, the world's biggest seller of the grain said.
It is likely that India, which will next week decide on whether to relax a four-year ban on mainstreamwheat exports, will permit shipments of 1m-2m tonnes, Canadian Wheat Board said. However, with harvestin the world's second-biggest wheat producing country expected to come in at a record 82.3 million tonnes, there is significant scope for additional trade. Although domestic consumption, of 78m tonnes in 2009-10, is rising fast, India built up hefty stocks of grain through government support programs –raising concerns of where to store the grain.
"India and Pakistan are on pace to challenge their all-time production records," Board said. "India will have a significant wheat surplus and could export upwards of 5m tonnes." While India's food minister, KV Thomas, already pitched himself against wheat exports, CWB highlighted gains from exploiting international prices still near two-year highs. "Any upward tick in world prices increases the motivation to permit exports," CWB 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 Pakistan to test its export record would mean shipments of more than 2m tonnes, as recorded in 2007-08and 2008-09. India reached its all-time high in 2003-04, with a 5.65m-tonne figure.
For both countries combined to export at record rates implies at least 7.85m tonnes hitting the market, roughly equivalent to shipments from Argentina, southern hemisphere's second-ranked wheat trader. PPI
