* India grows hardly 3 million tonnes of high-protein wheat
* Unlikely to grab major share in global wheat trade
* The country resumed wheat exports only in 2011
(Recasts, adds comment, prices)
By Mayank Bhardwaj
NEW DELHI, June 7 India's wheat stocks had piled
up to 44.4 million tonnes by June 1, government sources said,
more than a quarter of the world's total, as it fails to meet
export targets because of high prices and quality constraints.
India uses the stocks to distribute cheap grain in one of
the world's biggest food subsidy programmes which is set to be
increased further under a proposed new law.
But bumper harvests - the latest of which has just rolled in
- have swamped government warehouses and left stocks lying in
sacks under tarpaulin, vulnerable to rot and rats.
With global prices underpinned by concern about Australian
supplies and worry over shipments from the United States after
the discovery there of a genetically modified (GMO) strain,
India might have hoped to capitalise with exports.
But India has only sold a little more than half of the 9.5
million tonnes it has offered either directly to traders or
through state-run sellers as the major consumer refuses to
concede on price and buyers seek a higher quality.
"Japan and Korea were buying U.S. soft white wheat, a
high-protein variety used for cakes and biscuits, while our
wheat is suitable for preparations like roti," said Tejinder
Narang, adviser at New Delhi-based trading company Emmsons
India, one of the world's biggest wheat producers, has for
long focused on ensuring its 1.2 billion people have enough to
eat and encouraged its farmers to grow robust wheat that is
perfect for the flat breads so familiar in Indian cooking.
It resumed limited exports in 2011 as stocks piled up, but
is far from a major player and that means there's little
incentive to work on improving quality and packaging.
FLUFFY, HIGH-PROTEIN WHEAT
Nor is there any compelling demand domestically to produce
the fluffy, high-protein wheat preferred for making biscuits and
the loaves of bread typical of European bakeries.
Indeed, only small parts of the tropical sub-continent have
the right climate and soil conditions to grow that kind of
quality wheat, with about 3 million tonnes produced annually,
for domestic consumption.
"India has to feed itself as no other nation can supply food
to a country of more than 1.2 billion people. We need higher
stocks and higher production," Swapan K. Dutta, a top farm
scientist, told Reuters.
India spends nearly a trillion rupees ($18 billion) to sell
cheaper rice and wheat to a large section of its people.
The government in March offered 5 million tonnes direct to
private traders such as Cargill, Louis Dreyfus
and Glencore but none of this has so far
been sold as the floor price of $300 per tonne is not attractive
given current global levels of $280 per tonne.
"Wheat trade is dominated by the United States, Canada, and
Australia. And we do not have an intention or liberty of
muscling in," said a senior government official involved in
The government also stockpiles rice, another staple, but
inventories edged down to 33.3 million tonnes on June 1 against
34.7 million tonnes the previous month, the sources added.
Stable policy and steady exports have helped India emerge as
the world's top rice exporter, thanks also to private companies
which developed hybrid seeds and ensure consignments meet global
standards, trade and government officials said.
"Rice is mainly grown and consumed in Asia and that explains
our predominant position," the senior government official said.
(Additional reporting by Ratnajyoti Dutta; Editing by Jo
Winterbottom and Robert Birsel)