India has finally cut the floor price for exports of wheat from government warehouses by 13 percent, a government source said on Wednesday, to help boost stalled shipments from the world’s second-biggest producer of the grain.
Higher supplies from India, struggling with massive stocks of the staple, could dampen benchmark prices in Chicago which have just bounced back from a near one-month low hit in the previous session.
With the minimum price the government will sell at cut to $260 a tonne plus taxes, traders and analysts now believe Indian wheat will be competitive with rival supplies from the Black Sea region that had elbowed out New Delhi.
“It has been decided to reduce the floor export price for wheat to $260 per tonne,” a government source told reporters after a cabinet meeting.
The government managed to sell nearly 4.5 million tonnes of wheat — about 5 percent of annual output — earlier this year but since then all bids in state tenders have been below a $300 per tonne minimum price.