India wheat buoyed by export hopes after Russia ban

MUMBAI Aug 6 (Reuters) - India's wheat futures rose a second session on Friday on market talk of possibly increasing exports to Asian neighbours as a drought in Russia forced it to temporarily halt exports, analysts and trade said.

The most-active September wheat contract NWTU0 on the National Commodity and Derivatives Exchange (NCDEX) ended up 0.72 percent at 1,279.4 rupees per 100 kg after rising 1.55 percent in the previous session.

Three traders said there is a likelihood of India allowing more exports to Asian buyers as Russia's absence from overseas markets will boost prices. Russia is the world's third biggest exporter.

U.S. wheat futures jumped more than 5 percent on Friday, taking weekly gains to around 25 percent as Russia's move to temporarily halt grain shipments sparked a buying frenzy. See [ID:nSGE675072]

"India may release more grains to neighbouring countries like Bangladesh," said an executive with a multinational trader.

On Wednesday India's LMJ international was the lowest bidder at $285 a tonne, including cost & freight, in a Bangladesh tender to import 50,000 tonnes of wheat that opened on Wednesday, a food official said. See [ID:nSGE6730HF]

Bangladesh, the world's fifth-biggest wheat importer, is expected to buy more than 3 million tonnes of the grain this year against 2.2 million tonnes the previous year.

On July 28 Sharad Pawar, India's farm minister, said India will sell 300,000 tonnes of wheat and rice through diplomatic channels to Bangladesh and Nepal. See [ID:nSGE66R06W]

Trade expects India to allow upto 3 million tonnes of exports by end of December to manage stocks.

India holds surplus stocks of wheat and rice, but has severely curtailed grain exports in recent years to ensure steady domestic supplies. The country, however, allows exports through the diplomatic route.

Food Corp of India had stocks of 33.58 million tonnes of wheat as on July 1, against buffer norms of 17.1 million tonnes, government data showed.

"Indian market is likely to take cues from the global market ... government is planning to lift two-year ban on export of wheat," Karvy Comtrade Ltd said in a broker note.

The U.S Department of Agriculture estimated India's wheat output at 80.7 million tonnes, in a report released on Tuesday. See [ID:nN02261589], while the Indian government estimated it at 80.71 million tonnes, a record harvest. See [ID:nSGE66I0F6]

For a Q+A on India's wheat management. See [ID:nSGE66S0A4]

(Reporting by Sourav Mishra; Editing by Ramya Venugopal