October 5, 2006

India favours hike in wheat intervention price

India's agriculture ministry has recommended raising the intervention price of wheat for 2007 by Rp100 on the year to Rp750 per 100 kilogrammes, a senior government official said Wednesday (Oct 4).

"We have submitted our recommendations, but the final decision on the (intervention) price will be taken by the Cabinet Committee on Economic Affairs," the official told Dow Jones Newswires.

The government fixed the wheat intervention price for 2006 at Rp650/100kg and later announced an additional bonus of Rp50/100kg.

The official said a recommendation for a bonus has been made this year as well, but it has been suggested that the amount be set at a later date based on the actual prices in the local market.

In India, the government purchases wheat from farmers at a set intervention price to maintain buffer stocks and sells it at subsidised rates to the consumer.