WRAPUP 1-India, Pakistan closer to export wheat after years

* India to shortly allow 2 mln T wheat, product exports

* Pakistan likely to allow wheat product export on Tuesday

* India to export wheat after 6 years, Pakistan 2 years

NEW DELHI/SINGAPORE, May 18 - India and Pakistan moved closer on Monday to export wheat and wheat products for the first time in several years after bumper harvests left them with surpluses.

While India is near to exporting 2 million tonnes of wheat and wheat products, Pakistan is expected to ease curbs on wheat product exports on Tuesday, taking a step closer towards allowing sales of the grain.

The export of around 2.5 million tonnes from the two nations -- paltry in global trade of around 120 million tonnes -- could present competition to the Black Sea wheat in the Asian and the African markets.

Rising global wheat stocks have pressured the benchmark Chicago Board of Trade wheat <Wc1> this year, even though the market has found some strength in recent weeks on delay in U.S. spring wheat plantings.

India will shortly allow exports of 2 million tonnes of wheat and wheat products, but it will not subsidise shipments, Trade Secretary G.K. Pillai told Reuters.

"Exports will be allowed through select ports. This has been done to monitor how much wheat is being exported," he said, adding a formal government order would be issued shortly.

Indian traders said they were ready to immediately start exporting to neighbouring countries such as Bangladesh and Nepal but sales to other destinations needed government subsidy.

Wheat from India's eastern state of Bihar, where government agencies have not bought wheat, can be supplied to Bangladesh even at current international prices.

"Wheat exports to Bangladesh and Nepal are viable," said one Mumbai-based trader. "Wheat sourced from Bihar can be delivered to these two countries at $230 per tonne."

GOVERNMENT SUBSIDY

India, which sets the price of wheat it buys from farmers, announced a minimum support price for wheat of 1,080 rupees per 100 kg, or $225 per tonne, to ensure adequate returns for farmers.

Black Sea wheat is quoted around $230-$235 a tonne, including cost and freight to Southeast Asia.

Traders said exports to other regions was not viable without government subsidy.

"Theoretically, allowing exports without subsidy is fine, but practically it may not happen without government subsidy as international prices of wheat and wheat products are lower," said Vinod Kapoor, former head of Wheat Products Promotion Society.

In neighbouring Pakistan, the country's economic panel is expected to meet on Tuesday and allow sale of wheat products after the procurement this year reached eight million tonnes, the highest in seven years.

"The economic coordination committee meeting will take place tomorrow," said Shahid Raja, additional secretary in Pakistan's food and agriculture ministry.

"We are pretty sure it will be allowed tomorrow, they will revoke the ban on wheat product exports."

He said Pakistan is likely to sell up to 500,000 tonnes of wheat products to Afghanistan and the Middle East.

Pakistan, which consumes about 22 million tonnes of wheat a year, is expected to harvest a bumper crop of more than 24 million tonnes because the area under the crop rose following favourable growing conditions.

Two years of bumper harvests lifted India's wheat stocks to 29.8 million tonnes on May 1, rising by two-thirds from a year ago.