labels: economy - general
Government bans wheat exports, allows maze importsnews
14 February 2007

Mumbai: The government has imposed a complete ban on export of wheat and allowed free import of maize in a bid to bring down inflation, which has touched 6.5 per cent.

A notification by the directorate general of foreign trade said the ban on all varieties of wheat, including durum and seeds, would remain in force till the end of 2007.

The wheat crop for this season is estimated to be 72.5 million tonnes, marginally above last year's 69.5 million tonnes.

Though there were negligible exports of wheat in 2005-06, the ban is meant to ensure that the Food Corporation of India (FCI) would have sufficient stocks this year.

FCI's procurement had seen a sharp decline last year at 9.2 million tonnes from 14.8 million tonnes the previous year, forcing the government to go in for imports.

The free import of maize is likely to check the rise in prices, which has been triggered by increasing demand from the poultry industry and low production.

The spurt in prices of essential goods, such as wheat, dal, etc has been a significant factor in pushing India's inflation to a more than two-year high of 6.58 per cent. Wheat prices alone have risen by 11.74 per cent year-on-year.

While the government has asked procurement agencies to ensure adequate wheat purchases to maintain buffer stocks, the Reserve Bank of India has in the recent past announced a number of steps to curb inflation and money supply, the latest being the hike in the cash reserve ratio by a half per cent to six per cent - a move to curb credit flow.

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Government bans wheat exports, allows maze imports