MMTC to buy grain directly

India's largest trading house, MMTC, is putting in place a new system for directly procuring wheat and rice for exports to capitalise on the government's new grain export policy.

"As part of building new competencies, the company is setting up a system to procure grains and other agro-commodities from the mandis for exports", its chairman and managing director S D Kapoor said here.

He, however, said actual procurement by the Rs 10,000 crore company will only begin after the subsidy component is announced by the government under the new policy.

"We do not know the exact quantum of government support for direct foodgrain export by private traders, so its risky to take the plunge immediately", he pointed out.

Kapoor said company officials will be stationed in the main mandis in Punjab and Haryana to deal with the 'arthiyas' (intermediaries). He said the grains will be stored in godowns hired from the Central Warehousing Corporation and other locally available warehouses.

Procurement in a particular season will be based on the likely exports in the next six months so that the purchases are sold off before the next season begins. There is no point in long term storage of the procured grains as it will only add to the inventories and carrying costs.

Earlier this year, the Cabinet had given its nod to direct private grain procurement for exports but is yet to operationalise a scheme for WTO compatible reimbursements.