Indian wheat exports, almost grounded by a shortage of rail wagons and a government policy to halt sales of lower grade grain, are unlikely to pick up before May, traders said on Wednesday.

"Logistics are in a mess. I don't think much will change before the completion of summer harvesting," said an official of a global grains trading firm.

Traders said wheat exports, which started just two years ago, might resume only in mid-May when pressure on the nation's railways to provide wagons for local movement of grain eased.

They said the railways were giving top priority to moving grain for domestic consumption in drought-hit central and western states. It plans to persist with the policy until the summer wheat harvest, which will begin next week, ends in mid-May.

"The number of wagons allocated to exporters now are enough to move only about 200,000 tonne of wheat in a month, just a quarter of what used to be transported some three months ago," said one trader.

"Some traders even tried sending wheat to ports by road, but that turned out to be a costly affair," said another trader.

Exporters said they were yet to get wagons to move about 400,000 tonne of wheat, which had been bought from the state-run Food Corporation of India.

Traders are worried India's international credibility in grains markets could soon be under threat.

India emerged as a leading exporter with the government offering wheat for exports at low prices in a bid to cut bulging grain stocks, now estimated at 50 million tonne, and save costs of maintenance.

India, which mainly exports to Southeast Asia and the Middle East, shipped a combined 8.7 million tonne of rice and wheat in 2002, up from 2.6 million tonne in the previous year.

Grain availability

Traders said FCI has stopped selling lower quality ‘lustre-lost' wheat for exports since mid-December, pending an assessment of current stocks and the size of this year's grain crop and a revision of the export policy.

Some traders said FCI's stocks of ‘lustre-lost' wheat, which accounts for more than two-thirds of exports, had been exhausted as attractive prices drew exporters to the grain in the past two years.

This variety of wheat is about 20 per cent cheaper than good quality milling wheat sold by the FCI.

Traders said global and local firms were looking to cover about 500,000 tonne of wheat for delivery up to March and could lose money in the event of defaults.

Most outstanding deals were for exports to countries in Southeast Asia and the Middle East, traders said.