September 4, 2006

 

India's increased wheat imports welcomed by some, derided by others
 

 

India, expected to import eight million tonnes of wheat this year, would become the world's largest wheat importer, according to US wheat producers.

 

The announcement has raised a few eyebrows as India had not been importing any wheat for six years until recently.

 

The country could very conceivably import eight million tonnes of wheat before the year is over, said Mark Samson, vice president for South Asia at US Wheat Associates said last week.

 

The group's forecast helped drive the price of wheat to a two-year high on the Paris commodity exchange.

 

Multinationals like Cargill and AWB, which have been shipping wheat to India on a sporadic basis, hailed the news as it signified that they would now see a more stable demand from India.

 

Changing diets, swelling incomes, an expanding population and a fast-developing food-processing industry have all accelerated India's wheat consumption.

 

Meanwhile, low yields and obsolete production methods has hampered growth in India's wheat production.

 

The result is that, even as demand for wheat soars, supply is stagnant at about 70 million tonnes annually, driving prices even higher.

 

Critics of Indian policy say that India's government is letting the United States dump subsidised wheat in India at the expense of local farmers.

 

Also, policies which allowed private companies to buy wheat from local farmers has forced the government's food distribution system to buy wheat overseas at higher prices than locals receive.

 

While others saw recent developments as the beginning of the end for India's food self sufficiency, supporters of globalisation said the development provided India with the chance to wean itself off its emphasis on food security and shift more of its focus on higher-value products that would bring in export revenue.

 

India is one of the largest food-producing countries in the world, but one of the smallest food-exporting countries, said Beth Keck, a spokeswoman for Wal-Mart. Citing examples such as basmati rice, spices, mangoes and other fresh fruit, Keck added that there are some very attractive products grown in India that could be exported.