NEW DELHI (Reuters) - The cabinet will soon consider cutting the floor price for wheat exports by 13 percent, two government sources said on Thursday, potentially boosting supplies from the world’s second-biggest producer and easing benchmark prices in Chicago.
“After an inter-ministerial consultation, a note is being prepared to help the cabinet take up the issue of lowering the price to $260 a tonne,” said a government source involved in the process.
Another source confirmed the move.
No date has been fixed for the next cabinet meeting, which would be the final step for a cut in wheat export prices. Consensus between ministries usually means the cabinet will approve at this stage, although new hurdles can emerge.
Cabinet meetings are usually on Thursdays but it was not held this week because Prime Minister Manmohan Singh was travelling back from China.
Reuters reported on October 15 that the government might soon cut the floor price for exports of wheat from state-run warehouses, overflowing with stocks after bumper harvests since 2007.
Stocks will surge further as farmers are poised to harvest a bumper winter crop after above average monsoon rains raised soil moisture levels and replenished reservoirs.
Reporting by Rajesh Kumar Singh and; Mayank Bhardwaj; Editing by Jo Winterbottom and David Evans