January 29, 2007

India may need to import more wheat this year

India will have to import more wheat if it fails to procure at least 12-13 million tonnes of the grain in the coming rabi marketing season for public distribution system (PDS) and social welfare measures, according to the USDA.

The department noted that wheat stocks with the Indian government is likely to be around 3.5 million tonnes on Apr 1, 2007, which would be higher than the last year's 2.1 million tonnes but lower than the government's desired minimum Apr 1 buffer stock level of 4 million tonnes.

The amount of government wheat procured from the 2007 crop could be the most crucial factor influencing the government's wheat import decision this year, it said.

Though prices are expected to decline from the current high level following the arrival of new crop, it was doubtful whether prices would drop to the minimum support price of INR 750 (US$16.95) per quintal in surplus states, the USDA said.

This was primarily due to the probable increase in wheat purchased by the private trade and millers, it added.