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India considers allowing wheat shipments trapped at ports

·2-min read
FILE PHOTO: A worker spreads wheat crop for drying at a wholesale grain market in Chandigarh

By Mayank Bhardwaj and Rajendra Jadhav

NEW DELHI (Reuters) -India is considering allowing traders to ship out some of their wheat sitting at ports after a sudden ban on exports of the grain prevented dealers from loading cargoes, trade and government sources said on Thursday.

New Delhi banned wheat exports on Saturday, as an intense heat wave hit output and domestic prices hit a record high.

The sudden ban on wheat exports trapped about 1.8 million tonnes of the grain at ports, potentially forcing traders to take heavy losses.

On Tuesday, the government allowed grain awaiting customs clearance to be shipped out. But traders are pressuring the government to further relax its ban.

The administration of Prime Minister Narendra Modi is looking into the demands of wheat traders, government sources familiar with the matter told Reuters.

"We will verify the merit of the demand and no genuine trader will be harassed," said one of the sources who did not wish to be identified in line with official rules.

The government could ask for export data for the past few months to ascertain that they are bona fide dealers.

The government is aware that many genuine exporters are stuck because of the sudden ban, said a New Delhi-based dealer with a global trading firm.

"The government is trying to give concessions in a way that genuine exporters are protected," said the dealer who declined to be named in line with his company's policy.

The sudden ban has halted trading in many wholesale grain markets. Domestic wheat prices have dropped more than 4%.

Along with traders, transporters are also getting impatient, with their trucks waiting at ports to unload wheat.

"Piecemeal relaxations are not going to help and the government needs to resolve the issue in the next few days to avoid a chain of (payment) defaults," said the New Delhi-based dealer.

(Reporting by Mayank Bhardwaj and Rajendra Jadhav; Editing by Lisa Shumaker)

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