India has approved an additional 2.5 million metric tons of wheat exports, taking the total export quota to 5 million tons, as the world's second-largest producer seeks to support local markets.
The South Asian country in February approved exports of 2.5 million tons and raised the export allocation for wheat flour to 1 million tons.
The latest decision "is expected to enhance market liquidity, facilitate efficient stock management, and prevent distress sales during the peak arrival season," the government said in a statement.
Wheat supplies from the new season crop have begun, with prices hovering near the government-set floor price.
The government has forecast this year's wheat output at a record 120.21 million tons, while the Roller Flour Millers Federation of India has pegged production at 115 million tons.
"Traders are struggling to export wheat under the earlier allocation and are unlikely to export even 2.5 million tons in the entire season. In this scenario, the additional quota does not make sense," said a New Delhi-based trader.
India usually exports wheat to Bangladesh, Sri Lanka, Nepal, Afghanistan, Yemen and Indonesia.
