India to hold back export of grains due to poor monsoon

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New Delhi, July 9: World's largest supplier of grains, India, has decided to hold on to the stockpiles for the fear of less rainfall. Fearing depression, the Indian government has decided to hold back grains for the domestic market, instead of boosting exports. This could push the global prices for wheat and rice.

India had lifted a ban on exports of wheat and rice on September 11. A senior food ministry was heard saying,"We don't want to end up importing grains. We have sufficient grain stockpiles, but naturally there will be an impact because of the weather situation."

In fact, the government has decided to drop the auctioning of 5 million tonns of rice in an open market. Instead, they would be distributed to the poor through government welfare programs. The Central government has also decided to keep on hold a program under which wheat was being sold regularly through state-run trading companies to global bidders.

The Indian government had approved exports of up to 2 million tons of wheat by June 30. However, it did not issue fresh order after state-run agencies sold 1.5 million tons to global bidders.

India has received 43% below average rainfall at this time of the year as compared to the normal 70% rainfall that it receives between June to September. [Read full report by the Wall Street Journal]

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