July 28, 2006

 

India's STC plans to import 400,000 tonnes wheat at zero duty

 

 

India's government-run State Trading Corp (STC) plans to import around 400,000 tonnes of wheat at zero customs duty, a senior company official said Thursday.

 

"The government is building up its buffer stocks and informed us that it requires more quantities to run its sales programme," the official said.

 

We are importing wheat on behalf of the government. If they ask us to import more, we will do so," said the official.

 

While STC imports wheat at zero duty on behalf of the government, other companies are also allowed to import, but at a 5 percent import duty until December this year.

 

The official said the planned import volume is to be purchased through a tender, and details for issuing it are being worked out.

 

STC has already placed orders for importing 3.5 million tonnes of wheat to be delivered by Jan 2007. So far, 92,000 tonnes have already been delivered by the sellers, and up to another 846,000 tonnes are expected to reach Indian ports by end-August.

 

In India, the government purchases wheat from farmers at a set intervention price and sells it at much lower subsidised rates to consumers.

 

This year, the government has only been able to purchase 9.2 million tonnes of wheat from local farmers, down from 14.8 million tonnes last year. The local wheat harvest is completed in May each year.

 

Last week, the government scaled down its estimate for wheat production in the crop year to Jun 2006 to 69.48 million tonnes from an earlier estimate of 71.54 million tonnes, fuelling speculation of further imports. The target set for the year was 75.53 million tonnes.

 

Average local monthly subsidised sales have been brought down to 1.0 million tonnes from 1.4 million tonnes, but the government still needs to import wheat to replenish its stocks.

 

Last week, Food Minister Sharad Pawar said that a committee of government bureaucrats does a weekly review of prevailing prices and availability of essential commodities such as wheat.

 

"If they make any recommendation (for imports), we will see," Pawar said.