NEW DELHI, India (Reuters) — India managed only a marginal cut in bulging wheat stockpiles in March despite efforts to step up exports.
The development increased pressure on the world’s second largest producer of the grain to find ways to boost shipments and make room for a new harvest.
Wheat stocks in government warehouses were 24.2 million tonnes April 1, down nearly 11 percent from a month earlier, government sources said.
India has refused to sell its wheat below $275 per tonne, but it may have to reduce that level because global prices have fallen and it must clear space for another bumper harvest arriving soon to protect it from rodents and rain.
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New Delhi uses the stocks to distribute cheap grain to its half a billion poor people and also holds some in inventory for emergencies.
It has offered 4.5 million tonnes of wheat via tenders, of which 3.6 million have been contracted for ex-ports.
However, its two latest tenders found no takers among private exporters, who did not wish to bid above $300 a tonne, the floor price fixed by the government.
“There has been absolutely no response in the last couple of tenders, which is like a slap to the export policy, which needs to be reviewed against the backdrop of lower global prices,” said a trader with the Indian arm of a global trading company.
New Delhi has also offered another five million tonnes direct to private traders.
Direct sales have failed to take off as well, and the government is now considering reducing minimum price levels, sources have said.
Traders believe the government will have to cut the floor price to lure back private trading companies.
On March 28, the benchmark Chicago Board of Trade wheat contract posted its biggest weekly decline since June 2012. It has recovered slightly since.
India’s rice inventory on April 1 was 35.5 million tonnes, almost un-changed from 35.8 million tonnes in the previous month.
