* Inventory swollen after 5 consecutive bumper harvests
* Nov. 1 wheat stocks nearly three times government target
* India looks likely to harvest bumper crop in 2013
NEW DELHI, Nov 26 India should immediately allow an extra 5-7 million tonnes of wheat exports from overflowing government warehouses and cash in on attractive global prices, its adviser on prices told Reuters in an interview on Monday.
"We should allow 5-7 million tonnes of exports as soon as possible as any price which is $300 a tonne plus is very attractive," said Ashok Gulati, chairman of the Commission on Agricultural Costs and Prices.
Inventories have swollen after five consecutive harvests ran ahead of about 76 million tonnes of annual local demand, largely because of higher prices the government assured to farmers to protect them from distressed sales and back-up government subsidised food programmes.
To dissuade farmers from growing more, the government agreed with Gulati to keep the 2013 wheat support price unchanged. Still India looks likely to harvest a bumper crop.
On Nov. 1, wheat stocks at government warehouses were at 40.6 million tonnes, nearly three times the government's target.
Unmanageable stocks drove the state-run Food Corp of India to store large amounts of grain in the open.
Stung by criticism over its inability to protect wheat stockpiles from rot and decay, the government lifted a four-year old ban on exports in September 2011 and then allowed exports of 2 million tonnes from state-run warehouses as well.
"We should export more but the speed of the decision matters as prices may not be as attractive as they are now," Gulati said.
Two state-run trading companies - unlisted PEC Ltd and State Trading Corp of India - got the highest bids at $324 a tonne and $322.22 a tonne respectively in their latest export tenders.
"Anyway, an additional supply of up to 7 million tonnes does not matter in a global trade of about 140 million tonnes," he said.
Benchmark wheat prices started moving higher after the United States, the world's biggest exporter, was hit by the worst drought in more than half a century.
Falling supply prospects from other leading suppliers Australia, Ukraine and Russia have fanned prices further.
In the southern hemisphere, Argentina last week cut its wheat output forecast following months of heavy rain, while in Australia harvest results continued to show lower protein levels. (Additional reporting by Jo Winterbottom, editing by William Hardy)