August 24, 2009

India will import food grains and pulses and step up edible oil purchases from global markets to boost its buffer stocks as a prolonged dry spell has shrunk summer crops, but a late burst of rains will limit the shortfall by increasing winter crop output, senior ministers said Friday (August 21).

 

The government has decided to maintain, through imports, the demand and supply equilibrium for any commodity in short supply, Finance Minister Pranab Mukherjee said after meeting state government officials to assess the drought situation.

 

Out of the country's 625 administered districts, 246 have been declared drought-hit, after monsoon rains fell 26 percent below average during the June 1-Aug. 19 period.

 

India's Meteorological Department has estimated rainfall during the June-September monsoon season this year will be substantially below the long-term average, severely reducing plantings and damaging standing crops in many parts of the country.

 

But a late burst of rains in the past five to seven days over India's grainbowl northern region has limited some of the earlier damage to the summer-sown crops including rice, sugar cane and pulses.

 

"I anticipate early and higher coverage of winter-sown crops this year," the agriculture minister, Sharad Pawar, said at the conference. "This is a good opportunity to ensure that the wheat is sown in time."

 

Pawar said the government will intensify efforts to increase the winter-sown wheat acreage in new regions such as eastern Uttar Pradesh, Bihar and West Bengal.

 

The current grain stockpile in the world's second-most populous country is adequate to deal with the difficult situation arising from a drought, Mukherjee said.

 

"We are starting the year with good buffer stocks. The normal buffer stock for wheat is 4 million tonnes and for rice it is 5.2 million tonnes."

 

Excluding the 9.2 million tonnes of buffer stocks, India has another 3 million tonnes of wheat and 2 million tonnes of rice in strategic reserves, the minister added.

 

"Pulses and edible oils are in short supply and these are the commodities that we have been importing for some time," Mukherjee said.

 

The government has already allowed duty-free imports of crude edible oils, but refined edible oil imports still attract a tax of 7.5 percent.

 

India is expected to import 7 million-7.5 million tonnes of edible oil in the marketing year ending Oct. 31.

 

The country is the world's top consumer and importer of pulses, consuming 17 million-18 million tonnes a year, while output is usually around 15 million tonnes.

 

The government has already extended the duty-free imports of pulses through March 2010, and it continues to ban exports of all pulses except chickpeas.