India, the second-biggest grower of wheat, allowed private companies to export the grain for the first time in four years, Food Minister K.V. Thomas said.
A panel of ministers permitted overseas sales of 2 million metric tons of wheat and 2.1 million tons of non-basmati rice, Thomas told reporters after a meeting today. The exports will be halted once the specified amounts are shipped, he said.
Grain supplies from India may further cool global food prices tracked by the United Nations that dropped to 231.1 points in August on lower prices of cooking oils and dairy products. Higher grain prices limited the food-price gauge’s drop as an index of cereal prices climbed last month from July. The gauge was at an all-time high of 237.7 points in February.
India banned private companies from shipping wheat in early 2007 and non-basmati rice in April 2008 to bolster domestic supplies amid a global food crisis. Restrictions were eased allowing some quantities of wheat, rice and wheat products to be shipped to Africa, as well as Bangladesh and Nepal through state-run companies under government-to-government deals.
The panel on July 11 put off a decision to end the ban on wheat exports, while approving shipments of 1 million tons of non-basmati rice.
Shares of Kohinoor Foods Ltd. and other rice exporters gained today in Mumbai trading as exports may boost profits. Kohinoor advanced 7.3 percent to 42.55 rupees (92 cents), KRBL Ltd. surged 4.6 percent to 27.15 rupees and LT Foods Ltd. climbed 3.6 percent to 46.4 rupees.
Group of 20 farm ministers, including India’s, agreed June 23 to increase agriculture output, set up a crops database and limit export bans to tackle what French President Nicolas Sarkozy called the “plague” of rising food prices. Higher food expenses have pushed 44 million more people into poverty since June last year, the World Bank estimates.
Wheat exports from India may accelerate the decline in wheat futures in Chicago this year after the International Grains Council forecast increased supplies. World wheat production will rise to 677.1 million tons in the year through June 2012, the London-based Council said Aug. 25.
December-delivery wheat dropped as much as 2 percent to $7.365 a bushel on Chicago Board of Trade. Rough-rice futures for November delivery in Chicago declined as much as 2.7 percent to $17.66 for 100 pounds.
India likely harvested a record 85.93 million tons of wheat in the year ended June 30, a 6.3 percent increase from a year earlier, while rice output totaled 95.32 million tons, up from 89.1 million tons, Agriculture Secretary P.K. Basu said July 19.
The government, which buys grains from farmers at assured prices and sells to the poor at cheaper-than-market rates, had stockpiles of 33.62 million tons of wheat as of Sept. 1, up almost 13 percent from a year earlier, while rice reserves were 22.71 million tons, according to Food Corp. of India data on its website.