The Centre had allowed 4.5 million tonnes of wheat export from FCI godowns last fiscal through STC, MMTC and PEC. Of this, about 4.2 million tonnes have already been exported for over Rs 7,000 crore. (Agencies)
"The Cabinet Committee on Economic Affairs (CCEA) has approved export of 20 lakh tonnes of wheat from stock of Food Corporation of India during the current financial year subject to a floor price of USD 300 per tonne through the central public sector undertakings (CPSUs) STC, MMTC and PEC," an official statement said.
The government said a similar procedure would be followed for this round of export as well.
Additional exports have been permitted as the Centre is sitting on a huge stock of 40 million tonnes of wheat against the buffer requirement of 14 million tonnes at the end of September 2013.
The overflowing stocks in FCI godowns, despite sharp fall in wheat procurement this year; have put pressure on storage availability.
"Exports of 20 lakh tonne of wheat from the surplus central pool stocks of FCI would make available space for storage of fresh foodgrains in the godowns of FCI and thereby helping in proper management of foodgrain stocks," the statement said.
Apart from earning additional revenue on exports, government said, it would save expenses of about Rs 25 crore per one lakh tonne of wheat annually incurred as storage and handling costs.
FCI and other state agencies procured only about 25 million tonnes this year against 38 million tonnes last year.
The drop in procurement was due to fall in production and aggressive purchase by private traders.
Wheat production stood at 92.46 million tonnes in 2012-13 against a record 94.88 million tonnes in the previous year.
To clear stocks, the government had also allowed private trade to export 5 million tonnes of wheat from FCI godowns, but shipment did not pick up due to lower global prices compared with government benchmark price.
The Centre had allowed 4.5 million tonnes of wheat export from FCI godowns last fiscal through STC, MMTC and PEC. Of this, about 4.2 million tonnes have already been exported for over Rs 7,000 crore.