Wheat export ban back after 10 days

By Himangshu Watts

NEW DELHI (Reuters) - The government resumed its ban on wheat exports on Monday, 10 days after it said it would allow some shipments by state firms, as a precaution against a possible poor harvest due to insufficient monsoon rains.

The Director General of Foreign Trade said on Monday that the government had decided to "rescind, with immediate effect", its July 3 order that allowed state firms MMTC Ltd, State Trading Corp and PEC to export 300,000 tonnes each.

No shipments were reported in the period when the two-year ban was lifted and the country was unlikely to contract exports as international prices had fallen well below Indian levels.

The farm minister, Sharad Pawar, said monsoon rains were expected to improve this week, and if the forecast turned out to be accurate there would be no cause for concern despite below-normal rains so far this season.

"The Indian Meteorological Department expects good rains this week and if this prediction is correct, we are definitely out of trouble," he told reporters just before the commerce ministry slapped the ban on wheat exports.

India, which depends heavily on monsoon rains, saw the driest June in 83 years, after which rains improved but were still 8 percent below normal in the first week of July.

Low rainfall has also depleted India's biggest reservoirs, reducing their ability to irrigate fields even for winter crops such as wheat and rapeseed.

Industry officials said the government's latest move reflected its worries about the progress of monsoon rains.