June 14, 2007

India to issue tender for 2 million tonnes wheat

India, the world's second-largest wheat producer, will float a tender to buy 2 million tonnes of the grain by the end of June to build buffer stocks, a senior government official said on Wednesday.

Farm Minister Sharad Pawar said last week government stocks are already running short from its procurement by local farmers, thus, plans are afoot to import 5 million tonnes of wheat between August and December to augment local supplies.

Last month, the government scrapped a one million tonne import tender saying the prices quoted by firms were high.

India had imported 5.5 million tonnes of wheat last year to replenish depleted stock as the government could buy only about 9 million tonnes from farmers against a target of 16 million tonnes.

In the current season, the government hopes to buy about 11 million tonnes of wheat from farmers.

The government buys grains from farmers at a fixed price as part of its programme to help supply the grain to the poor at lower rates.

The official said the government would buy the new season wheat from farmers until June 15 in Punjab and Haryana, the country's top wheat producing states.

India is seen to produce 73.7 million tonnes of wheat in 2007, up from 69.3 million tonnes last year as farmers planted wheat on over one million hectares more.

The country consumes around 70 million tonnes annually and production has been languishing around the same level.

India grows only one wheat crop in a year. Sowing is in winter months of November and December and harvest begins from March.