November 8, 2006

USDA: India may import 4 million tonnes of wheat

India might have to export up to 4 million tonnes of wheat if the government procurement remained at the same level, said the US Department of Agriculture in a report.

However, the decision to import wheat next year would depend on the crop size in the ongoing Rabi season and the quantity that the government would be able to procure once the crop is harvested, said the report.

Further, the agency felt that the Indian government's recent decision to increase the Minimum Support Price of wheat by Rs 100 (US$2) to Rs 750 (US$17) per quintal might not translate into higher procurement as private companies would pay a higher price.

It was however, too early to say whether the government would impose any restriction on inter-state movement of foodgrain and stock holding limit to tide over with the shortfall in procurement as had been done in the past.

The wheat stock at the disposal of the government stood at 6.4 million tonnes as at October 1, much below the usual minimum buffer stock level of 11 million tonnes, according to the USDA report.

The wheat stock as at April 1, 2007 could be about 2.5 million tonnes as against 4 million tonnes desired stock level, if the government's wheat off-take for Public Distribution System was about 1.3 million tonnes per month during October-March, the USDA said.